Selecting the right contractor
Subcontractors often play an important part in the success or failure of construction projects. It’s therefore vital to ensure that not only is care is taken to select the right subcontractor, but also to ensure the subcontractor is managed correctly.
Unfortunately often subcontractors are selected only on the basis of price – the subcontractor with the lowest price is awarded the project.
This is often the same problem when clients, owners and developers select the General Contractor or Main Contractor where the cheapest price is often the deciding factor. Failure to select the right contractor for the project and only considering the contractor’s price is often a recipe for disaster which can result in delays, additional costs, disputes, poor quality and even accidents. Choosing the wrong contractor can lead to regret long after the project is complete.
Questions to ask your contractor or subcontractor
The more that can be discovered about the contractor before they are awarded the work the better. Not only can the capabilities of the contractor be researched, but it may be possible to discover their strengths and weaknesses which will, in turn, enable them to be better managed on the project.
Past performance, however, is not always indicative of how a contractor will perform on a project and I have, on occasion, had good subcontractors that have performed poorly, due to them being over-committed on other projects, which meant they had insufficient and poor quality resources for my project.
Adjudicating subcontractor and contractor quotes
Sometimes contractors don’t adjudicate their subcontractor’s prices correctly. When comparing quotes are you comparing ‘apples with apples’? A price may appear cheap but when all the factors are taken into account the total price may be more expensive than the other prices.
When adjudicating prices check that the supplier, contractor or subcontractor has:
Compare the price with prices received from other contractors. A price substantially lower than the others should set off alarm bells and it is worth investigating why the price is so low. Sometimes contractors are desperate for work and submit a low price – this however comes with risks and a contractor whose price is too low may be tempted to take short cuts to make money – using inferior materials and skimping on resources. A contractor whose price is too low may also become bankrupt part way through the project which will void warranties and cause delays and additional costs to the project while a replacement contractor is appointed.
Of course there is nothing wrong with awarding the work to the contractor with the lowest price (even if their price is much lower than other prices), providing that you have ensured that they are the right contractor for the project, that there are no hidden extra costs which will be incurred later and that the contractor can deliver the project for their quoted price.
It is important that the documentation included with the request to price (request to tender) is complete and includes the terms and conditions for the project as well as the full scope of works, the project conditions and the obligations of both parties. Projects often incur additional costs and even sometimes lengthy contractual disputes because of poor contract documentation which is incomplete or ambiguous. (I will discuss subcontractor documentation in a future article.)
Selecting the right contractor, adjudicating their price thoroughly and appointing them using an enforceable contract which is complete with all the project’s terms and conditions can usually avoid delays, additional costs, extra management time and disputes later. Don’t simply select the cheapest contractor – it may be a very expensive mistake!
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5/4/2018 08:06:30 pm
Contractors play an important role in the success or failure of construction projects. So care should be taken not only to choose a right contractor but also to ensure that he is correctly managed. Often contractors are selected only on the basis of price. We often offer the project to contractors with the lowest price. Before hiring a contractor or subcontractor, we must ask some questions to them. First we should ask them are they experienced or not in similar projects. Do they have sufficient people with required skills as well as the right equipment in the quantities required or simply saying do they have enough resources.
8/4/2018 10:01:17 am
Thanks Katia, you are correct to say that the right contractor must be selected, but then also they need to be managed correctly.
28/8/2018 09:08:59 pm
I really love that you mentioned finding out if they have the necessary amount of employees to finish the project. It would be nice to meet some of them as well to get an idea of their work ethic. Also, it would be nice to look into the training they received before working for the company.
29/8/2018 09:20:45 am
Hi Frank, you should definitely ask for the CV of key people that will work on your project - like the project manager and supervisor.
29/1/2021 08:51:49 am
I find it amazing to learn that hiring a general contractor can help with your project by finding the right people for the job. My friend is thinking of renovating his home's interior into his personalized gaming den. I think it would be a good idea to leave this project to these experts.
1/3/2021 12:03:48 pm
You made a good point when you shared that it is important to ask the contractor if he is able to complete the desired work that has been proposed. This will ensure that you can be confident with their ability to produce the remodeling project that you have been wanting to do. I would like to think if a business owner is thinking of doing remodeling work, he should ask first and consider the experience of the potential contractor.
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Copyright 2016 - The attached articles cannot be reproduced for commercial purposes without the consent of the author.
The opinions expressed in the attached articles are those of the writer. It should be noted that projects are varied and different laws and restrictions apply which depend on the location of the contractor and the project. It's important that the reader uses the supplied information taking cognisance of their particular circumstances. The writer assumes no responsibility or liability for any loss of any kind arising from the reader using the information or advice contained herein.
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