Most medium and large construction jobs are handled by a general contractor or GC. The general contractor may be called a builder, building contractor, remodeling contractor, etc. What makes him a “general” contractor is that he enters into a contract with the owner to complete a project and takes full responsibility to get the job done for the bid price. In general, he purchases the materials, hires the tradespeople, and brings in subcontractors to get the work done. The subcontractors are responsible to the general contractor, not to you, the owner.
Choose your contractor carefully! No other decision will have a greater impact on the success or failure of your project. Great plans, contracts, and construction documents cannot get good work from someone lacking in skill or integrity. Find someone whom you can trust and feel comfortable working with. If you have to pay a little extra to hire the right person, you won’t regret it. The savings from hiring the low bidder often evaporate as the job progresses.
Assume that there will be problems along the way and select a person whom you feel will work cooperatively with you to find the best solutions.
Among the GC’s responsibilities are:
- Estimating and bidding the project
- Negotiating a contract with the owner
- Hiring and negotiating contracts with subcontractors
- Obtaining the necessary permits and scheduling inspections
- Establishing a payment schedule based on work progress
- Disbursing money to subs and material suppliers
- Creating a schedule for workers, subs, and deliveries
- Negotiating material prices and ordering materials
- Interpreting the plans and specifications
- Supervising and coordinating the work of employees and subs
- Troubleshooting job-site problems
While doing all of the above, the GC is often meeting with the owners to address their concerns, while juggling the myriad little things that can turn his tightly scheduled enterprise into chaos. For example, bad weather slows down the framing crew, so the plumbers and electricians need to be rescheduled, but his favorite electrician will not be available when needed, delaying the insulation crew. Later, the special-order windows are shipped with the wrong jamb profile, requiring custom shop work or another long delay. And so on…
In larger companies, the GC will probably have a foreman, lead carpenter, project manager, or superintendent (in a development), overseeing day-to-day job-site management. In smaller companies, the GC may be on the job site regularly, even swinging a hammer from time to time. In any event, the GC is a busy guy or gal and arguably deserves the 20% overhead and profit they typically (hope to) earn for holding it altogether. Their profit comes from some combination of marking up labor costs, subcontractor bids, and material costs.
As you see, GC is a busy person – like the conductor of an orchestra making sure each section comes it at the right time. A lot of this energy goes into managing the subcontractors. In general, smaller companies rely more on staff carpenters and larger companies rely more on subcontractors to get the work done. Nearly all companies use subcontractors for the mechanical trades such as plumbing and electrical, and most use subs for excavation and foundation work, roofing, drywall, and painting. On smaller jobs, they may do some or all of this work with their own crew members.
A good contractor has good relationships with competent and reliable subs. That means the subs will show up when needed and do good work with minimal supervision. They know what level of work the contractor expects, they know they’ll get paid promptly, and they know that the job will be ready for them when they show up. For example, the drywallers can’t hang their drywall until the plumbing and electrical are completed and the walls are insulated.
While some subs, such as insulation installers, are not known for the precision of their work, they know that if they want work from a particular contractor, they need to meet his standards. Maybe they can charge a little more for the higher level of quality he demands, making it worth their while to take the time to do it right. In the end the owner pays a little more for a job well done – seems fair to me.
Some companies use their own crews for framing and finish carpentry, especially for finicky work such as built-in cabinets or ornate trim and other decorative details. It’s also best to use the in-house crew for special energy details, unusual wall systems, or other details that are not the domain of a specific trade.
If you are working with an architect, they will often provide names of contractors who they have worked with successfully. That’s a good place to start, but whether you are starting from scratch or with a list of names, the process is pretty much the same. The bigger the job, the more effort you should put in to finding the right contractor. One strategy is to hire them to do a small job and see how it goes.
In general, however, you find a contractor the same way you find a doctor, lawyer, or other professional whom you have to trust is competent and reliable. As with a doctor or lawyer, a lot is at stake if the contractor messes up. Problems can range from small annoyances (escaping pets, loud bad music) to major lawsuits if things go badly.
The best place to start, I believe, is with your circle of friends and acquaintances, as well as neighbors who have had work done recently. Look for projects similar to your own in size and complexity: new home, dormer, large addition, kitchen remodel, gut-rehab? Ask who did the work, and how it went, who did the design work, and so on.
Check references. Once you have narrowed your search, ask each contractor you are considering for a list of references and call them. Ask about both the quality of the work, the ease of working with the contractor, and whether there were cost overruns. See the list below of “Questions for former clients.”
Background check. For larger jobs with large amounts of money at stake, it’s also essential to check with the Better Business Bureau and your state’s contractor licensing board to see if complaints have been filed. If complaints were file, how were they settled?
Also, it is important to confirm that the contractor holds a valid license in the state, and in your city or county as well if they also issue contractor’s licenses. If you hire a contractor without a valid contractor’s license in your area (not just a business license), you are losing any protections offered by the licensing board.
Look under both the company name and the contractor’s name, as less-than-scrupulous contractors have been known to change company names when things get too sticky. In states where licenses are granted to individuals, rather than companies, make sure you are signing the contract with the contractor actually holding the license. Otherwise you will lose any protections.
Finally, in some states, it is relatively easy to see if a contractor has been sued and for what – or has sued clients. There may be a reasonable explanation for one or two lawsuits over the course of a long career, but I would want to know who sued whom and for what reason. If it raises any red flags, best to keep looking.
Questions for former clients might include:
- Have you worked with this general contractor (GC) before?
- How did the job go? How did it compare with other contractors you have worked with?
- Did the GC communicate clearly throughout the project?
- Was the GC on the job frequently? If not, who supervised the work on site?
- Were there any problems or surprises?
- How was the work quality?
- Were there cost overruns or delays, and why?
- Would you recommend them for your type of job?
- How long have you been in business at your current location?
- How many jobs like this have you complete?
- What is the average square-foot cost for this type of job?
- How much experience do you have with energy-efficient construction, green building, passive solar (or whatever your special interests are)?
- Who will supervise the construction on site?
- Who will I communicate with about job progress, changes, and any problems that may arise? (Yes, there will be problems!)
- What work will your own employees perform (as opposed to subs)?
- How do you prefer to work: competitive bid, cost-plus, negotiated price, or something other?
- What is your company’s greatest strength?
- (For remodeling): What efforts do you take to keep the job site clean and safe for children, and to keep dust out of the living quarters?
- Do you have a standard set of written specifications?
- Do you use a standard written contract that I can review?
Hiring a general contractor, without the benefit of an architect to handle contract and job administration has its pros and cons, as follows:
Pros of working with a general contractor (without an architect involved in the construction phase)
- This is the simplest way to get a large project completed.
- May be the least expensive based on competitive bidding (other than self-contracting)
- One-point responsibility for materials, workmanship, scheduling, and budget controls. If there’s a problem, it’s the contractor’s responsibility to fix it.
- A good contractor will have good subs, who show up on time and do work to the standards set by the contractor.
- If you have a good contract, and a fair payment schedule, you will some leverage throughout the project. You should always make the final payment contingent on all work being completed properly.
Cons of working with a general contractor
- There are no checks and balances, so you have to put a lot of trust in the GC.
- If there are problems, there’s no one to mediate (although some contracts have a mediation or arbitration clause). You’ve got to work things out directly with the contractor, who probably knows a lot more than you about construction.
- If the contractor writes his own plans and specs, it may be difficult for you to evaluate them for quality and completeness. Does the bid include everything you want done? (Oh, you wanted us to fill the 500 nail holes in the natural-finish pine trim? – that will cost extra.)
- If the contractor cuts corners, or doesn’t properly supervise subs, work quality can suffer. How will you know?
- If there are problems, delays, change orders, and upcharges, you have limited leverage in negotiations.
Whichever way you go, there are no guarantees in life – or in construction. Even with an architect or professional inspector hired to inspect the contractor’s work, at the end of the day, you’ve got to hire someone you can trust to do good work and act with integrity. So really ask around, check with the Better Business Bureau, and check references. Find someone with an excellent reputation and strong track record in the community. Find someone you have a good rapport with. Find out if the contractor will be on the job site regularly and will be available to you if there are problems.
You and your contractor will essentially be business partners for duration of the job, so choose someone with honesty and integrity. Problems will arise during and probably after any large construction job, so it is important to find someone who you feel will act fairly and responsibly in resolving any issues that come up. Make sure the person you hire passes the Used-Car Test. If you wouldn’t buy a used car from this person, don’t hire him or her to build or remodel your home.
Choose a company that fits your style and personality. If you like a warm and personal approach, a small one-crew company might be just right for you. The contractor may be on the job daily swinging a hammer. The crew may do most of the work themselves and use relatively few subcontractors – usually better for finicky, specialized, or very customized work. If you want speed, efficiency, and professionalism, a larger more corporate outfit might suit you better.
Whichever way you go, proceed with your eyes open. Be smart: Trust, but verify. By that I mean, make sure the specs provided by the contractor are sufficiently detailed and complete and will meet your expectations for quality (you can get a second opinion from a construction manager or architect if you’re not sure). Make sure the bid is realistic – that allowances are adequate for the materials you will probably choose. Ask to see certificates of insurance. Read the contract carefully – have it checked by your lawyer if it seems too murky or one-sided.
Finally, don’t expect to the get the best job from the low bidder. If one bidder is significantly below the others, either he is making a mistake (often due to inexperience), is planning to make up the difference in change orders, or is at risk of losing his shirt and may end up cutting corners or even walking off the job.
While I want a good deal as much as anyone, I rarely end up hiring the lowest bidder. Instead I look for the person I can trust the most to get the job done correctly. Often, the savings you thought you were getting with the low bidder later evaporate into the haze change orders, extras, inadequate allowances, and headaches.
Read more on Cost Overruns.