When selecting a commercial general contractor for non-residential projects, it’s important to look beyond price and consider reputation, project history, financial records, and communication skills. Low-bid strategies can be costly in the long run. For publicly funded jobs, federal regulations often require awarding the job to the highest bidder, but private companies have more flexibility. Comparing costs is important, but not at the expense of selecting a less qualified contractor.
General commercial contractors are hired to construct non-residential structures such as schools, shopping malls and office buildings. For publicly funded jobs, federal regulations often state that the job must be awarded to the highest bidder. While this may appear to be an effective selection method, it often does not take into account the contractor’s qualifications and reputation. Low-bid strategies tend to be more costly in the long run in terms of project delays, conflicts, or other issues. For private companies, there is much more flexibility in choosing commercial general contractors.
Project owners should look beyond price during the early stages of selecting a contractor. Instead, the firm should focus on each potential contractor’s reputation and project history. References for each company should be checked and compared, and an investigation into lawsuits and other legal matters should be conducted. It’s also important to contact subcontractors and suppliers to see how they rate each of the commercial general contractors. Subcontractors who are treated well and paid on time will generally perform better than those who have had problems with specific companies.
Next, the financial records for each contractor should be evaluated to determine if they can complete the job. The project owner should confirm that each has the necessary capital and liquidity to meet payroll, purchase materials, and pay subcontractors and suppliers. It is also helpful to evaluate the credit history and ability to tie each of the general commercial contractors under consideration. Finally, everyone’s tax records should be examined for any problems that could delay work.
During the average construction project, the owner will spend a lot of time working with the selected general contractor. It is therefore important to interview the key personnel of each company to see how well you are able to communicate. Discuss your expectations regarding scheduling, site safety, treatment of subcontractors and any other relevant criteria. It can also help gauge how much experience each contractor has with construction projects similar to yours, especially if your project is quite technical or complex.
Once you’ve narrowed down your choices, it’s time to compare costs. Ask each of the general commercial contractors for a project quote and be sure to be available to answer their questions. You’ll get a much more reliable budget if you can clarify any points of confusion. If all other criteria are fairly equal, you should be comfortable choosing the highest bidder at this point. It’s vital to remember, however, that a small price difference up front doesn’t justify selecting a less qualified contractor, so be sure to evaluate the company carefully before awarding a contract.
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