The process of choosing a Commercial Contractor

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What is a Commercial Contractor?

Your actual first step when looking for a commercial contractor is to know what they do. Seems pretty obvious, right? As the name suggests, a commercial contractor is a general contractor who specializes in commercial construction.

However, unlike a residential contractor, a commercial builder works on projects such as builds and remodels of schools, corporate offices, restaurants, retail buildings and more.

A contractor will oversee all stages of construction sometimes including: Design, permitting, supply purchases, building codes adherence, and zoning regulations. (BC)

Four Keys to Hiring the Right Commercial General Contractor

Key #1: Check Contractor Histories, Credentials and Reviews

Start with the basics: pull up the company, their qualifier name (the license holder), verify it exists and is active. Is all their documentation up to date? What does their history look like? Any complaints? Also check with the local Better Business Bureau for ratings, complaints and how they resolved those complaints. Get a better view of contractors by visiting their websites and checking out attributed testimonials (i.e. with full names and contact information for references.)

Key #2: Check Their References

Don’t be afraid to ask contractors for references. Any hesitancy or inability to provide what you want is a red flag. (Make sure they’re not family and friends, but valid references.) You may be working with these people for months or a year, so you want to be sure the contractor will deliver as promised. Be sure to inquire as to the contractor’s supervisors, managers, and other staff. Were they easy to work with? Are they expected to be a part of your project team? Finally, compare the quality of the projects done by prospective commercial contractors by inspecting their work.

Key #3: Get to the Bottom Line about Costs

Cost is not the only factor, but it is an important factor. And how a general contractor arrives at a bottom-line fee requires asking a lot of questions. All costs should be illustrated in a divisional itemization with as much detail as may be required to make accurate comparisons. Following are some of the key questions in the form of a checklist, which can be of value when issuing a Request For Proposal (RFP):

  • Are there any pre-construction costs and if so, what are they?

    • Not always warranted but always valuable, can occur during the gap time during planning, design and permitting prior to a construction start.

    • Fees include time to assist in specifying for value, field investigation, program scheduling, phasing, permitting strategy, feasibility and constructability, budgeting, meetings, and due diligence costs.

  • What are the “soft costs?”

    • Such as general conditions or requirements to build; costs for supervision, management, permitting, safety, cleaning, public safety, hoisting, communications, temporary facilities, etc.

  • What will I pay for Contractor’s services?

    • The basis for its fee: a stated fee or percentage arrangement based upon costs. Learn more about the benefits of a Design-Build process.

  • How transparent is the commercial general contractor in disclosing its costs?

    • The answer here will generally be relative to the expected contract relationship. An owner should expect less disclosure from a “lump sum” agreement while a “cost plus a fee” agreement will require increased fiduciary responsibility of the Contractor. The builder should get three or more bids from its vendors, more from the more common trades, but possibly less than three when specialty trades are involved. It should be noted that this fiduciary responsibility will prohibit the professional contractor from stacking the deck with expensive subcontractors, collusion, etc.

    • In either example, “Shopping” takes place at the contractor level, however, the cost plus a fee arrangement will allow for owner participation in subcontractor selection and even pricing negotiations. There are hybrids of these relationships and arrangements for shared savings as well.

Note! It’s important to understand that if numbers 1 to 3 meet your criteria, there is no need to “bid” your project to multiple general contractors as the rules of the road, fees, selections, etc. can be established above.

Key #4: You Get What You Pay For: Beware of the Lowest Bidder

There’s a good reason we’ve mentioned low bids twice, but… when selecting between multiple contractor bids, don’t necessarily accept the lowest offer. You know the old sayings, “You get what you pay for” and “Cheap is expensive”? It’s especially critical in selecting a local contractor as the scope of work and inclusions/exclusions can be far more important than the number.  Beware low-ball quotes meant to win a job at any cost. (GSD)

Reading through the above information might seem a bit daunting as a soon to be business owner, or from the standpoint of a small business looking to expand with a new location. However, that’s what No Place Like Home Remodeling does, we make transitions like opening a new office space easy and even enjoyable!

We’ll be with you every step of the way, guiding you until that open sign lights up on your front window. Send us an email or call us today for your free estimate — after all, we’re here to help!