Building Nevada - December 2003

Choosing a Contractor

Look Before You Leap

by Jeff Manning

You’re the program manager for a corporation or an entrepreneur setting out to establish your own business, and you need a facility. You’re faced with a potential headache that two aspirin won’t cure quickly: building it. Interview, interview, interview. Never go out with an architect and a set of architectural drawings and simply sign up the lowest-priced bidder. Doing your homework up front and choosing the right firm will keep you from experiencing all kinds of nightmares.

Here are some basic requirements for contractors to help you avoid headaches, heartaches and costly mistakes:

Expertise in the type of project that you are considering

Consider a firm that can provide you with information on projects they have completed. Look for projects with requirements similar to your own. Look at the complexity and diversity of all of the types of buildings the firm has been capable of handling. Have they built the Eiffel Tower and the local bank, or are they more limited in their capabilities?

References and background

Get a list of references from the firm, and call them – all of them. Here are some questions to ask:

Was the project management team easy to work with?

Were they fair in budgeting for extra work items?

How smooth did the overall project run?

Was it a safe project?

How were unforeseen problems handled?

Were there time delays or cost over-runs?

How many broken promises did the general contractor make to the owner, if any?

Did the management staff stay assigned to the project from the beginning to the end or was there a lot of turnover? (A revolving door on a project is sure to cost an owner time and money.)

Find out who the subcontractors are and call them. Ask the subs if the contractor is fair. Does he pay his bills on time? Hiring a general contractor who doesn’t pay his bills can result in liens and legal issues.

Acquire public information

Contact the Better Business Bureau, the attorney general, the Nevada State Contractors Board, the Nevada Occupational Safety and Health Program and local contractor organizations.

Ensure financial stability

The financial health of the firm is of utmost consideration. Purchase Dunn & Bradstreet reports, search public records to find out if it has any pending lawsuits or outstanding bills, acquire an audited financial statement for the previous year from the firm, and ask for a quarterly forecast for current projects to ensure it is financially sound. Ask about its insurance carrier and bonding agents, and contact them.

Hire reputable members of the community

Are the employees of the firm your fellow community members? Employees should live and work where you do. That makes a big difference in the quality of the relationship you will enjoy and how you will be treated before, during and after your project is completed. The contractor should have a strong local presence, an overall successful track record, preferred local subcontractor pricing and a long-term relationship with county building department and fire department officials.

Ask, "Who is running my job?"

It is imperative that you review the background of the team that will be managing the day-to-day activities of your project. Find out who the project manager, superintendent, project secretary and engineers are going to be. Acquire the resumes of the actual on-site staff and insist on interviewing them individually.

Understand your estimate, your contract and your warranty

Make sure to explain that you will review the estimate and the contract in detail prior to signing and proceeding with the project. Hire a local consultant or attorney who is knowledgeable in construction contract documents to review the information. Understand all of the terms and conditions described in the warranty paragraphs of your contract and ensure that you will be fully warranted for all workmanship for a minimum of one year after the project has been completed.

Keeping these items in mind, and doing a little preliminary homework, can save you from many problems with your construction project.

Jeff Manning
Jeff Manning is director of business development and project manager for The PENTA Building Group in Las Vegas, a commercial general contractor serving market segments including hospitality, healthcare, gaming, distribution, retail and commercial.