Vetting a general contractor is probably something you’ve never thought about until you actually needed to hire one. Greg DeJohn, President of GSD Contracting, provides some questions to ask during the hiring process that will give you confidence as you start your commercial construction project.
How long have you been licensed as a general contractor?
You can find out the answer to this question and the information surrounding it by asking questions that are standard to a job interview in any industry. For example, as well as “how long have you been licensed as a general contractor?” include:
- Tell me about your background.
- What motivated you to become licensed?
- What was your philosophy behind doing that?
Asking questions that attest to the character of the company will help you learn far more.
Greg points out: “You can also follow up these questions by asking ‘how long have you been practicing in the field in your business?’ There are millions of licensed builders but only a percentage actually practice and use their license.
Are you bonded and insured?
Insurance and bonding are incredibly important when it comes to building anything from a new office to a retail building. Insurance protects both the professional and the owner in the event of an accident, injury or damage to property. Bonding means that a third party company has reviewed the professional and has granted him or her a certain amount of surety bonding. The bond helps protect the owner from financial damage if the contractor fails to complete work or doesn’t pay subcontractors.
Insurance is a state requirement to become a licensed general contractor and to maintain licensure. A good question to ask is “what are your insurance coverage limits?” Someone who has the minimum insurance required by the state is telling as to whether the contractor is an entry-level builder or has been around long enough to qualify for projects that demand better insurance. DeJohn explains it this way: “If you’re looking to build a million dollar project and you have a builder with minimum insurance, you should raise an eyebrow as to why.”
While anyone with a license can say they’re insured, bonding is different. Not every company is bondable. The qualification process for bonding requires a track record of financial stability, proof of performance, and both personal and corporate net worth. To qualify for a bond is a completely different level of qualification. Don’t hesitate to request a letter of bond ability from a recognized underwriter attesting to their willingness to write a bond for the contractor.
“Just knowing that your contractor is bondable is a good thing; but any contractor that says they are bondable should be able to produce a letter to that effect from a recognized bonding company. This is a cost-free way for a client to not just take the builder’s word that they are bondable. Most contractors will answer this question affirmatively to get the job, but they should be able to provide this letter,” says DeJohn.
Can you provide me with several references?
A successful general contractor should be more than willing to share past projects with you as well as give you references. Be wary of the general contractor who doesn’t offer this information. It is your responsibility to do your due diligence. Ask past clients about the communication style of the pro, how they felt during and after the project, and if they would hire this GC again. Standard interview questions are also a great way to get this type of information.
Many clients take the approach of selecting a contractor based on their industry. For example, if they are looking to build a bank, they will look for a contractor that has experience building banks. However, what really matters is finding a general contractor who has done projects of that size and complexity in the past.
DeJohn explains, “The idea that a client who wants to build a shoebox will look for a builder that has built a shoebox is a buying criteria that’s skewed in the construction industry. The real question is ‘Is this builder qualified to build my building?’ This can be demonstrated by a lot of other experience besides having built for the exact same industry in the past.”
What is the best way to communicate with you and your crew?
Get clarity upfront about how many other projects the general contractor might have under construction through the duration of your project. If you are one of several projects, how can you best get ahold of the contractor? Understanding the chain of communication is important. A client should know who they are supposed to contact when they have questions or clarifications, and whether they will be dealing with the project through a dedicated project manager or directly through supervisors in the field.
This question should also lead into how the project will be managed and staffed. Some construction companies employ a full time project supervisor while others have supervisors on multiple jobs. One of the greatest differentiators of GSD Contracting is that our supervisors are dedicated to their project. We provide one supervisor per project at minimum so that there is always a qualified overseer on the project during working hours. This is an important distinction as there are instances where day labor pool resources have been used by competitors to reduce costs, a dangerous practice indeed. Having a project supervisor on more than one job means that at any given time, there is a project that is not being supervised. This may save the contractor staffing costs, but at the risk of safety, quality and time.
When can I review a contract?
After your initial meeting with your general contractor in which the overall scope of work and expected budget is discussed, ask when you can review the contract or share your preferred agreement. Ultimately, the contract should include all the details of the project as well as a breakdown of costs and payment schedule. While the contract may be lengthy, take the time to review it so that you understand the scope of work and the down side or risks. Any experienced contractor should be open to discussing these topics freely, as well as good and bad experiences, upside potential and downside risk. A quality agreement will also have provisions for unforeseen changes in the work.
Asking for a sample contract is wise to do in the early stage of interviewing a contractor. DeJohn explains, “A client can ask the contractor for a sample contract agreement similar to what they would propose for your project. You should figure out early on if they’re using a generic industry agreed upon contract that’s balanced or a contract that’s one-sided. Rather than waiting, it is good to anticipate early the expected personal and contractual relationship they should expect. It’s a good way for the parties to know each other from the start.”
Are you at a reasonable comfort level to take on the project?
Ultimately, you want to know why the contractor should be awarded the project and if they’re prepared to take it on. Request a firm date when to expect the proposal, have an understanding of how the proposal will look, and agree upon the level of monetary breakdown or itemization that you are comfortable with.
Entering into such an agreement should create a relationship of trust; neither party should have to resort to pointing out the finer points of contract language to settle differences. As in any relationship there will ideally be an apparent “fit” to avoid anyone having a fit! Establishing realistic goals and providing a set of quality construction documents will go a long way – setting it all to a good written document will be the third leg of that stool.
GSD Contracting Welcomes Your Questions
As a leading South Florida commercial contractor with extensive experience in everything from new bid-build and design-build projects to major renovations, we truly welcome questions from prospective clients. From our experience, an informed and engaged client is the best client. We will always take the time to help you understand how the process unfolds, and how you can stay engaged without the building project taking you away from running your own business. If you have a construction project coming up, don’t hesitate to get in touch so we can help you understand your options. Call Greg DeJohn at 954.961.4222 ext. 106 and be sure to visit us online.