A Process: Choosing the Right Contractor
By: Adam R. McManus
When choosing a contractor, the time of year makes a difference. If a project is well planned, a completed design package may be best timed for a fall or early winter bid process. Building envelope restoration is highly weather dependent. Spring through fall seasons are typically very busy months for restoration contractors, who are often willing to provide more competitive bids during the slow months to lock in a backlog of work for the upcoming year. On a restoration project of an existing building, contractor selection typically follows the completion of the design. Once an architect or engineer provides a bid package to the building owner or manager, invitations to bid are typically sent out to contractors.
There are a few questions regarding bid invitations that are commonly asked:
How many contractors should be invited? An engineer or architect, as well as a property manager/owneras representative, typically have a combined pool of recommended contractors. If too many contractors are invited to bid it may discourage some bidders from entering a very large field of unknown competitors. Too few contractors may miss out on value engineering potentially included in a broad field of bidders. Typically, 3 to 6 contractors are the recommended range for bid invitations. If a contractor drops out or becomes disqualified early in the process, it may be necessary to add a contractor to maintain a minimum of 3 bidders.
Who should be invited? Whether the project is a small balcony repair on a landmark building, or a comprehensive facade restoration project on a high rise building, there are contractors better suited for each project type. Some projects are open shop and others require union labor. Other criteria are also important in the selection process, including available labor force, experienced project managers and specialists in the application of systems required in the design package. Choosing a contractor based on their areas of specialization and level of expertise can be essential to a successful project and client satisfaction.
How do we know these contractors are qualified? It is common to have the bidders include a pre-qualification form during the bid process. This form can verify licensure, insurance, changes in company name or ownership, litigation history, company size, years in business, etc., along with providing their recent experience on other similarly sized projects. A carefully reviewed pre-qualification form can be a very useful tool in a post bid interview. A contractor should also provide references for completed projects of a similar scope and magnitude. Sometimes a client or designer may desire to see these other projects in-person. It is always a good idea to check references and past projects before making the final choice. Background checks on the contractor may be necessary including checks of their insurance policy coverage. Finally, a contractor who has had a successful work history with, and is recommended by, the architect or engineer of record or property manager, should be strongly considered.
How can a Contractor make impressions on the client and designer of record? An excellent way to evaluate a contractor is through a face-to-face interview. If a contractor provides a coherent presentation of their companyas image and capabilities, exhibits a good grasp of the project requirements and instills confidence in the client that their goals will be achieved, it may expedite the final selection. The creation of a written detailed project schedule, including the number of work days and the level of labor force necessary to complete the project, is also critical to the evaluation.
How should the price be evaluated? When soliciting bids, price does matter, and projects are often awarded to the contractor with the most competitive bid. However, individual line items in a proposal should always be closely evaluated. For example, if the mobilization is more than 10% of a project, there is the possibility that the bid price was afront-loadeda to amass larger payments early in the project. If individual line items are regarded as alowa or ahigha in comparison to other bidders, it could indicate the contractoras unfamiliarity with certain areas of work. Many of these inconsistencies can be addressed and resolved during the bid interviews. If the contractor is deemed a viable candidate for the project following the post-bid interview, it is common to ask them to take a final look at the bid proposal and provide any necessary revisions, as a best and final offer.
What should be considered when awarding a contract? A bid proposal form should include the number of days to complete a project. When the contract is drafted, the number of work days, including start and completion days, may be referenced. A comprehensive specification should include requirements for a manufactureras warranty and installer’s guarantee. The contractor often drafts the contract for the client on an AIA contract, however, the client may be better positioned if they draft the contract before the bids are due and the contractor signs an agreement to the contract as part of the bid process. The execution of a contract may be delayed by the contractor and client attorneys for an inordinate amount of time if the terms of the agreement remain in negotiation. Avoiding a drawn out contract review may salvage the projected start date.