Selecting The Right Contractors and Subcontractors for Your Construction Project

7/8/2019

Selecting the wrong contractor could be the death of your construction project

Have you selected the wrong contractor or subcontractor for your construction project? The contractor performed badly, with delays and poor quality? Perhaps there were hidden extra costs and their final price when the work was complete was much higher than you expected?

Regrettably many construction projects go badly because the wrong contractor or subcontractor is selected. Often owners or contractors are only focused on the lowest price and select the cheapest contractor who is sometimes the wrong contractor and proves to be very costly. It’s therefore important to consider the following when selecting your contractor:

Does the contractor have the required experience to deliver the work? Don’t just take their word for it, check their references and visit their completed projects.
Do they have the applicable registrations to do the work? Ask to see the registrations.
Can they produce acceptable quality? Some construction projects and clients require contractors to have particular quality registrations. But more importantly, have they produced good quality work on their previous projects? Do they have a quality management system? Do they have the required people and skills to produce good quality work?
Have they worked on similar construction projects? This not only relates to the type of construction work that’s involved but also to the type of project and client. For instance, many contractors may be able to deliver a similar project on a commercial building project in the city, but have no experience on working on remote mining or oil and gas projects which have specific requirements and require more onerous safety standards. There is also a large difference between contractors that build low-cost houses, to those that build houses for the luxury market.
Do they have the resources to carry out the work? This includes equipment, management, and the craftspeople. If they don’t have the resources can they access the resources and will they be able to manage them?
Do they have the financial means to carry out a project of this size? Because of the way project finances are structured, with contractors usually only being able to invoice for work once it’s been completed and then they’re only paid one month to three months later, often after the client has deducted retainage monies, contractors often experience negative cash flows on their construction projects until they are substantially complete. The larger the project the larger the negative cash flow will be. Contractors have to be financially secure, with sufficient cash reserves to withstand the negative cash flow on this project combined with the negative cash flows they may be experiencing on other projects they’re working on. But furthermore, if contractors are suffering losses on other construction projects this could cause them financial stress on the new project which could mean they can’t pay for people and materials on your project. In extreme cases the contractor could become bankrupt partway through the project, which would leave you in trouble, facing delays and additional costs, while you find another contractor to finish the project.
How does the size of the construction project compare to the size of projects the contractor has undertaken in the past? Contractors may have successfully completed smaller projects, but managing a large project can involve different management techniques. In addition, larger construction projects require more resources and more support from their head office. Larger projects also impact contractor’s cash flow more than smaller projects do.
What other work are they currently doing? If they are involved with other large projects they may not have the resources or the finances to undertake additional work.
What is their safety record? A poor safety record is often indicative of poor management. But, contractors with a poor safety record shouldn’t be used on your construction project. Accidents delay projects, they result in negative publicity for the project, it usually involves lengthy investigations and masses of paperwork which takes everyone’s attention away from getting the construction completed, and poor safety could get the project stopped until the contractor rectifies the safety breaches.
Do they have a good reputation?
Have they got a record of being claims orientated and engaging in legal disputes with their clients? You don’t want to have to waste time arguing spurious variation claims or engaging legal experts to argue frivolous disputes. Sure there will probably be changes and additions on your project, but you should be comfortable that the contractor will deal with these in a prompt and fair manner, as you should also deal with their claims.
Are they reliable and complete their projects on time?

It always pays to check references, who did they work for previously and were they happy with the contractor’s performance. Even visit their completed projects to see if you’ll be happy with the standard of work. Past performance, however, is not always indicative of how a contractor will perform on a project and I have, on occasion, had good contractors perform poorly on my project due to them being over-committed on other construction projects, which meant they had insufficient and poor quality resources for my project.
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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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Hazel Owens link

17/10/2021 02:48:43 pm

Thank you for giving a proper guidance on selecting the right contractors for a construction project. My uncle is looking for constriction services to build a bigger office as they are expanding their business. I love how you mentioned that we should look for a constriction service that have worked on similar construction projects because contractors there will be a large difference between those who has experience and those who don't. I will share this tips to him so that he could look for the right construction service for his new office.

Jeff Carbine link

21/12/2021 09:31:32 pm

I never knew that often owners or contractors are only focused on the lowest price and select the cheapest contractor who is sometimes the wrong contractor and proves to be very costly. Having a good contractor to choose the best design and option for the land is really hard. Thank you for sharing information about construction and contractors.

29/12/2021 07:47:37 pm

I never knew that the way project finances are structured, with contractors usually only being able to invoice for work once it’s been completed and then they’re only paid one month to three months later, often after the client has deducted retainage monies, contractors often experience negative cash flows on their construction projects until they are substantially complete. It is really hard to be in construction. I'll share this post with my uncle so that he could have ideas on what to do about construction services.

Braden Bills link

29/12/2021 10:27:38 pm

I want to get an area excavated so I can get a pool installed. It makes sense that I would want to get a professional to help me out with this. I'll be sure to find one who has a reputation for quality.

Hailey Miller link

13/1/2022 10:57:07 am

Thanks for pointing out that some construction projects and clients require contractors to have particular quality registrations. I would imagine that any aspiring building owner would want to have a durable structure. I think they should look for a commercial construction contractor who can use the latest excavation and utility installation equipment to efficiently break ground.

Roof Repair Daphne Al link

13/1/2022 10:25:53 pm

For instance, many contractors may be able to deliver a similar project on a commercial building project in the city, I truly appreciate your great post!

22/1/2022 07:48:55 pm

I found it interesting when you said the negative cash flow will be greater the larger the project. I used to think differently about it not until you explained it briefly and it really got my attention. What you said about excavating contractor was really interesting to me.

Victoria Addington link

28/1/2022 08:42:26 am

It's a good point to ask your commercial contractor if they have worked on similar construction projects since each project demands specific requirements and safety standards. This got me thinking that it's best to hire a commercial contractor with vast experience in building a different kinds of commercial places. With that said, I'll ensure to look for a commercial contractor with proven experience in building similar projects to ensure they are well-versed to construct them.

Kristofer Van Wagner link

10/2/2022 10:36:49 am

I do agree that it is important that we hire civil contractors for our earthworks that have all the relevant resources. In doing so, we will not need to hire additional contractors or sub contractors for the job. Assuming that I am looking to have a contractor hired, I will definitely look at their resources.

2/3/2022 01:44:38 am

It helped when you discussed that it's crucial to review a contractor's references and see their finished projects. I think that will allow you to assess if the contractor can handle your commercial construction project. I will make sure to follow the tips you provided here to ensure I am hiring the best commercial construction contractor.

Tex Hooper link

31/3/2022 09:41:12 am

You make a great point about how accidents can delay projects. I need to get an excavating crew to dig a pool for me. I'll have to consider getting a contractor who is licensed to do it for me.

Vivian Black link

22/4/2022 06:52:43 pm

I like your suggestion to consider if the commercial construction contractor you hire to improve your business is already familiar with not only similar projects, but also the type of client you are. We have a small business downtown, so we want to hire a contractor with experience on projects in an urban setting. We will probably get started on our project in a month, so we will be calling for a contractor before then.