5 Things to Consider when Hiring a General Contractor

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In my consulting practice as an owner’s rep, when I go about making a recommendation to hire a general contractor, there are a number of different attributes that I look at. The complete list is too long to describe in full, but the following are important ones to consider:

1. Look at the capabilities of the entire team.

Building projects are administered not by a human being but a team of human beings. It’s vitally important for you to understand the strengths and the areas for improvement of the general contractor’s team that would work on your project.

You’ll likely interface with the owner of a construction company if they are small. In a larger company, you will deal with what is referred to as a construction executive. Then there would be a project manager and a superintendent. Those are 3 very important roles relative to the success of your project. I suggest you establish the relevant attributes and then score them relative to others you are interviewing. Determine who offers the advantage over the other…attribute by attribute. How experienced are they with what you are asking them to do? As an owner’s rep, I drill into that. The question is not how friendly they are. It’s not whether you think of them as a good guy. That’s not irrelevant, but you have to dive deeper during your inquiry. How do they handle problems? What problems have they encountered in the past and how did they sort through that problem? Even better, what did they do to avoid problems? If you need access to the owner of the construction company or the executive in charge—how accessible are they going to be? How much time do they spend getting dirt under their fingernails? These are all vital questions you should be asking.

2. What degree of transparency is going to be offered up by the construction contractor?

Transparency is relevant on most of my projects. Most of the contracts that I suggest for ownership as part of my construction consulting services involve complete transparency in so-called project costs. I have nothing against firms making money. But I am interested to know what the costs are and this is sometimes an electronic issue. Some firms elegantly communicate these to ownership. It’s important to understand if they are willing to share this data with you and how. Other control pieces I get are, for example, a daily report with photographs of a project every morning by 6 am. This contractor uses an electronic format to make sure this occurs. It is very helpful. Finally, you want to know how open and honest they are going to be with problems. If they have a subcontractor who’s not performing, how will you find out? What are they going to do about this? None of these things are easy questions.

3. Are they in too little or too much in demand?

It is essential to know what this construction company has going on right now, i.e. work in progress. And/or what do they anticipate they will have going on in the near future? If they have a lot of work or not much work, either side of the coin can be problematic. If they don’t have very much work, that’s interesting. I invite them to talk to me about why they don’t have much work. There could be a logical explanation for that, but it’s good to know. Good owner’s rep firms know that if a contractor has too much work, then the organization is being stressed (potentially). You frequently see companies pulled in too many different directions. Regardless of what they are lipping to you in the interview, you might want to get a bit more of a firmer commitment about what you’re hearing because it sounds like they’re being pulled all over the place. This is a problem you don’t want showing up.

4. What is their experience in this particular sandbox?

Look at the specific experience a contractor has relative to your project type and then determine which firm you are interviewing offers you the advantage. Say the project is a 2-story, 30,000-square-foot office building. If they’ve done one of them, that’s quite a bit different than a firm that’s done 30 in the last 10 years. The latter firm offers you an advantage relative to this attribute.

You’ll need to drill down into their experience with the particular kind of contract you’re suggesting the firm enters into with ownership. There are a variety of forms of contracts: design-build contract, construction manager-at-risk, a lump sum construction contract. It would be good to know their specific experience in the contract type/form of project delivery. If they have worked in an analogous contract form, whatever it might be, find out with whom? How often? All of these would be indicators of their suitability for your project. For example, if you can find out who they contracted with, you can call them up and ask how it went. If they have repetitively been a party to design-build contracts, then they are a design-builder. If that’s what you’re looking for and they’ve only done it once or twice, and you are interviewing a firm that has done say 30 design-build contracts, then the latter firm has an advantage relative to that attribute.

5. Are they trustworthy?

At the end of the day, we are trying to hire firms that we trust and respect. Respect has a lot to do with capabilities (most of which you can confirm). Trust is trickier. In a nutshell, it means whether they are going to do what say they are going to do. To suss this out, call other owners this firm has worked for. It’s a litigious world and sometimes executives you interview are hesitant to talk honestly, but I am usually able to open that door. You don’t exactly ask, “Do you trust them?” Instead, ask questions that lead you to indications of whether they are trustworthy. Regardless of success, there’s going to be some level of conflict in every project. Ask owners how they dealt with that. Another key identifier of trustworthiness is whether, when they tell you something will be done—even if it’s not specifically written in the contract—was it done? Somehow or other, you’ve got to get to the trustworthiness thing and determine which firm you’re talking to is more trustworthy than the other.

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