According to ASA’s The Prime Contractor Factor, the primary ingredient in a customer evaluation program is information. Naturally, you will have a clearer idea of the answers to your questions for customers that you have previously worked for, since you have first-hand experience of their business practices. You may even schedule interviews with prospective customers to uncover additional information. Other sources to consider are:
- ASA chapter Business Practices Interchange programs (where available).
- Work references.
- Public records of debarment or disqualification.
- Better Business Bureau data.
- Court records of bankruptcies, lien filings, judgments, and lawsuits.
- State and local registration, qualification and licensing bodies.
- Financial reporting services.
With information about your customers in hand, you can develop a chart to calculate their relative “scores” to give you a better idea of when you should ask for changes in contract language, of when to raise or lower your bid price, and even when to “walk away” from a deal. Giving yourself these options will show that you are committed to not just develop new business, but also to develop business that is worthwhile, profitable and not too risky. ASA’s white paper on The Prime Contractor Factor provides a guide on how an individual subcontractor can set up its own prime contractor evaluation program.