In last week’s blog Building is a Two-Way Street, Part 1, I pointed out that contractors are not the only ones being evaluated at the stage of project formation. Owners: contractors are evaluating you, as well, in regards to whether they will pursue your project. The best contractors are selective in who they want to do business with. I have put together a checklist of sorts covering the aspects they often look at. The contractor that builds your project is arguably one of the most important elements of your team, so owners would do well to keep this checklist in mind.
Part 1 covered how together you are regarding financing, your building needs, and your project organization including whether you have construction management or owner’s representation services dialed. If you haven’t read it, I recommend you do so. Part 2 covers timeline, pricing, and how the architect you choose reflects on your good judgment, or lack thereof.
Take Care in Architect Selection
I know a contractor colleague who is completing a significant project—a 40-story building—and it was a type of building (condominiums) that the architect had never designed before. Now the contractor is paying the price for that inexperience and ownership’s selection. Understand that the whole project package is going to be evaluated by the contractor, including your choice of architect. What do their documents look like (from prior projects or this one?)? What sort of reputation do they have in the marketplace? How experienced are they in what they have been asked to design? Doing a hospital and it’s the first time this architect has done a hospital? Thank you, no.
Alternatively, the contractor could arrive at the conclusion that everybody is going to be disinterested in this opportunity, so they’ll stick their foot in this pond but with pricing that is disproportionately high. Other aspects you’ll want to think about include: Is the architect going to do the contract administration? Are you going to use an owner’s rep or project manager? How is that going to work? The contractor is going to want to understand the answers to these questions to some degree. All these things can be in process, but they should be part of your ongoing discussions.
When Do You Want This Project Completed?
The next thing it’s important for you to visit about is the schedule, or the answer to the question, when do you want this completed? How long before you need this project for its intended use? Perhaps the best thing for an owner to do when they’re asked that question is to say, “I don’t know, what do you think?” The contractor is the expert on building so they should have a better idea of the time it will take to complete the project. There are so many balls in the air regarding project implementation, it’s good to be able to have your wits about you on this topic and not inadvertently say something either too short or too long.
What’s Your Cost or Investment Expectation?
This bullet point is incredibly tricky territory. I am not entirely sure that I have the right answer on this topic, but I’ll share with you my thoughts on the subject of pricing. Traditionally, owners are hesitant to reveal their budget to contractors. Often ownership errs on the side of saying a number that’s too small (fearful that of course the contractor will spend all of this!). That’s human nature, but it’s dangerous. Let’s say you want to spend $150 a square foot and that’s pretty close to what the market is. To keep them honest or to push them down, you say in response to an inquiry, “I’d like to spend $125 a square foot.” As a result, the contractor might decide not to lean their ladder against your wall, where if you had said $150 a square foot, they would have pursued your project. (They’re not going to say, “You don’t have enough money.” They will tell you they’re too busy.) It’s reasonable for owners to want a project done economically. To try and anchor a firm below what everybody believes it’s worth, including you, is not the way to go about discussing the concept of project cost. This is tough territory, and I lean toward more honesty and integrity. It is yet another reason why it’s often good to have an owner’s rep conveying this message. One of the advantages of using a construction consultant is that sometimes these difficult conversations are better to have indirectly.
Everybody, whether they acknowledge it or not, is in the risk management business. If you are entering a capital project, there is a downside element that needs to be evaluated. Trust me—everybody else that’s involved in the project is going to be looking at you, the owner, and evaluating their risk based on how together you are. They may not have that discussion bluntly with you, but they will look at the situation to assess whether this project is likely to go smoothly or whether there is higher risk in this delivery method and with this team.
You can hire PrayWorks for months or a year or whatever your project takes and you can get among the best and the brightest contractors. Rent our expertise, and you’re on your way to a successful structure. There may not be a need for many organizations to have someone with our skills on an ongoing basis. But for a moment in time our expertise is a great thing to have. Give me a call to discuss your project.