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Selecting a General Contractor? Some Things to Consider

Published January 28, 2016

Are you looking for a General Contractor (GC)? Is your project ready for bid with plans in hand? A General Contractor delivery method is used often in the construction industry. This type of delivery method utilizes firms that are specific in one area or another and will bid the work based on the drawings the owner provides. There is little to no transparency and the General Contractor selected does not need to show the owner where the pricing originated from or how they came to their bid price. The bid is based on the drawings/plans provided by the owner and if those plans change, the bottom line price changes. This type of delivery method is used for small to mid-size projects and can be easily managed by the owner. However, if there are uncertainties in the drawings or design changes with the architect, it can become muddled because the price will continue to fluctuate. There is no Guaranteed Maximum Price in a General Contractor bid delivery method it is a lump sum price.

If your project is built in this manner, here are a few key things to look for when selecting a General Contractor:

  1. Location. Typically with a local contractor, you can rest assured that they are utilizing local subcontractor pricing and true market value. If a general contractor is submitting a bid from another part of the state/country, the pricing might be off and you might pay more than you need to for the project.
  2. Bonding Capacity. Depending on the dollar value of your project, you want to be sure that the General Contractor you select is bonded and licensed to cover the amount of your project. As an owner, the worst case scenario is if a GC goes belly up or walks off of a job. If this happened, the performance bond would assure completion of the project. If the GC has no bond the owner could be liable for paying to have the project completed.
  3. Reputation. In a bid process, typically you will not be pre-qualifying a GC. Be sure to ask around to any local subcontractors in your area that are familiar with the local General Contractor pool of applicants. Personal experience (good or bad) can dictate what type of service you will receive from your selected General Contractor. Do they perform quality work? Are they reliable? Do they have the staff to perform the work? Are they litigious?
  4. Stability. How long has the General Contractor been in business? During the boom, there were a number of GC’s that were here one day, gone the next with no real history or roots. When choosing a General Contractor for your project, take a look at how long they have been in business to ensure they are not a “fly by night” outfit. These firms may not have the best reputation in town and might not be the best option for you, even if they are the lowest bidder. The lowest price is rarely the best value for your project.