By Dave Milam and John Parker
Perhaps you’ve heard one of those nightmarish stories of the leader who mistakenly hired the wrong general contractor and ended up in a major pickle. Instead of creating momentum, the project produced an embarrassing, costly mess, ending late, over budget, and with shoddy construction.
Choosing a general contractor to spend the money you’ve raised for a building project may be one of the most important decisions you will make as a leader. Though there’s no foolproof way to maneuver through the selection process, you can improve your chances of success by asking these seven key questions before hiring a general contractor for your building project.
1. Does the contractor have proof of license and insurance?
Be sure to obtain proof of license and insurance from your contractor—no matter the size of the project.
Contractors who are unlicensed or uninsured put your organization and property at significant financial risk. Double check that the licensed name matches the name on the contract and that the contractor’s license number is also listed on the contract. The insurance they carry should also be adequate for the size and risk of your project.
2. What is the contractor’s communication protocol?
You’ll want a general contractor to use the latest communication technology during your project. Understand the contractor’s process to track revisions to the architectural drawings, official “requests for information” (also known as RFIs), and changes to the architectural plans. You’ll also need to make sure the architect is on board with this communication system.
Some of the most cutting-edge firms use software where the plans, drawings, submittals, RFIs, daily reports, and photos are all accessible on the iPad. This high-tech communication protocol allows the team to mark up the drawings, take pictures, and send them directly to the architect (and others) in real-time for quick responses.
3. What is the contractor’s “contract delivery method?”
Understanding this fundamental question is crucial to choosing the right general contractor.
The three most prevalent construction contract delivery methods are 1) lump sum or fixed price 2) cost plus and 3) guaranteed max price (GMAX). Make sure you clarify which delivery method your contractor will be using. Here is a quick breakdown of each delivery method:
- Lump sum (or fixed price) is a delivery method where the contractor sets a fixed price for the project. This method is like buying a car at CarMax. The price is fixed, and there is no requirement to disclose a breakdown of costs. If the contractor completes the job for less than the fixed price, he keeps any and all of the savings. The contractor is not required to show you his costs on the project and is entitled to change orders and other adjustments that may help pad his pocket.
- Cost plus is a delivery method where the total project cost is determined by the cost of the work plus the contractor’s overhead and profit. The downside of this contract method is the owner assumes all the risk for surprises along the way and there is little motivation for the contractor to save on costs. In fact, the contractor makes more money if the project goes over budget.
- Guaranteed maximum price (GMAX) is a delivery method where the contractor guarantees the total project cost will not exceed a specific set amount. This method provides the peace of mind of the lump sum method with the transparency of the cost plus method. With a GMAX, the contractor locks in the top range and allows the owner to see the actual project costs. If the price comes in under the GMAX, there are project savings that are shared between the owner and the contractor. And if the total cost exceeds the GMAX, the contractor eats the overage. A GMAX enjoys a shared risk of cost between the contractor and the owner. As a result, the GMAX contract is the most collaborative project delivery approach.
4. What does the contractor see as the most significant challenges with the project?
Occasionally, you should throw in a question that will give you valuable information about your project. Asking your contractor about potential challenges will not only reveal how much knowledge they have of the project but will also inform you of potential project hurdles.
Also, find out how the contractor mitigates changes that may impact the project’s cost and schedule during the build. Changes come in a variety of forms; they can be owner changes, unknown or discoverable issues, or drawing errors or omissions. Either way, there should be a clear plan to address each of these challenges.
5. What is the contractor’s schedule?
Spend some time discussing how the contractor prepares, follows, and updates the schedule. A mismanaged plan can cost time and a ton of money. Make sure the contractor’s project superintendent develops, monitors, and updates the schedule with assistance and input from the project manager on a regular basis.
It’s important to know how the contractor determines the schedule duration. The most accurate type of construction schedule is a method called a “critical path schedule.” A critical path is the sequence of project activities that add up to the most extended overall duration. This strategy helps determines the shortest time possible to complete the project.
6. Does the contractor do “clash detection?”
Have you ever been to a major concert event and had general admission seating? With no assigned seats, the venue can quickly become a madhouse of wild concert goers fighting each other for the best seat in the house. It’s a much more peaceful experience when everyone knows what seat they have and how to get there.
Unless your contractor uses special “clash detection” modeling software before groundbreaking, your plumber’s pipe plan could clash and interfere with the HVAC’s vent plan.
So, make sure to ask if your contractor plans to conduct “clash detection in BIM (3D modeling)” with architectural, structural, fire sprinkler, and mechanical, electrical and plumbing (MEP). This service locates areas of clashes in the computer model before it happens in the field. Field conflicts can be very costly to resolve and cause delay.
7. What is the plan if you disagree with the contractor?
It may feel strange to ask your contractor about how he plans to handle disagreements. Yet, this question is critical.
There needs to be a step-by-step plan to resolve disagreements when disputes arise. Before the project begins, both parties should agree to sit down and reasonably solve conflicts together. There will likely be disagreements on change orders, extra work, schedule, expectations, and finishes. Before the project even begins, you need a flow chart plan that serves as an agreed upon path for resolving differences.
It’s also recommended to name and appoint a neutral third party (non-binding), to help resolve disputes before formal mediation or arbitration.
Be uncompromising when asking and answering these seven questions as you take the first steps of your building project. If you are persistent, these tests will help you interview, evaluate, and select a general contractor that will help you fulfill the vision that God has embedded deep within the heart of your congregation.
JOHN PARKER is president of Visioneering Studios, a team of nationally licensed architects and general contractors.
DAVE MILAM is vice president of strategic design at Visioneering Studios.
Visioneering Studios grew out of the desire for the church to regain a leadership position in culture. Since its inception in 2002, Visioneering has grown into a national faith-based design-build firm offering its suite of services to churches, nonprofits, and commercial businesses alike.