In all building projects, the general contractor (GC) you choose for the work matters because the GC is central to the project’s success. A general contractor translates your design into a real building. Their expertise will determine the quality of the building and the relative ease with which you complete the project. A good GC knows the problems you may encounter on a project and how to help you avoid them. The general contractor can make or break your project.
But when embarking on a multifamily construction project, as Redsail Management explains, you will be spoilt for a choice of general contractors to use for the project. Based on how they present themselves, many of these GCs will look like a good fit for your project.
And their cost estimates may even be within the same ballpark. When you are in this situation, how do you determine which general contractor is the best for your multifamily construction project? This post will guide you in what to look for.
1. Relevant experience
When looking at a contractor’s experience, you are not simply looking for general building experience, but relevant experience. The contractor must have worked on projects that are similar in size, cost, and other specifics to yours. Relevant experience also means that the contractor has experience working in your area and dealing with the regulatory issues that apply. A local company is usually better.
2. Specialized team
Where you start to see if a company has the specific abilities to work on your project is in their team. A company may have worked on similar projects in the past, but if the project manager or construction superintendent for those projects is no longer in the company, the organization may not really have the expertise. You should look at the resumes of the company’s team members.
3. Consider only licensed, bonded, and insured companies
The companies must be licensed by the state agency responsible for such affairs. Also, they must be a respected member of a recognized professional body for their industry. The company must show proof of general insurance (GL) to safeguard against injuries and lawsuits. And, for your own protection, the GC must be bonded. This ensures that if projects are not completed, you will not be stranded.
4. Look at several bids
The more bids you have from qualified firms, the better for your project, price-wise. Ideally, you should get 3-6 bids. But it may not always be possible to get that many bids, depending on your location and the type of project. Having many companies to choose from gives you leverage in negotiating with contractors. At the minimum, you should have three bids.
5. Request a detailed project description
A comprehensive project description offers a firm basis for estimating costs and project timelines. A GC who is able to provide you with a detailed project description introduces transparency into the relationship. The project description shows that the GC fully understands your project and it explains how the contractor will deal with some of the major problems that will happen in the course of the work.
6. Investigate references and claims
Your due diligence when choosing a contractor should include investigating the past clients a company lists on its website or the references it provides. It includes doing background checks on its principal officers and investigating the company’s licensing, insurance, and bonding status. When talking with past clients of a GC, ask what it was like working with the company and if the client will use them again in the future.
Communication during a building project is critical. How often will the GC provide updates on the project? And what is their preferred mode of communication? And how long does it take them to respond to emails?
In times when you have needed clarification on certain aspects of their bid, how long has it taken to get answers and how good were the answers? These will provide some early warning signs of how hard or easy it will be to communicate with your GC.
8. How does the GC gets paid?
General contractors will either charge a flat fee or a percentage of the project cost. Each fee structure has its pros and cons. If a contractor charges a flat fee, you have a clearer idea of your overall costs. However, some contractors may look for other ways to make money on the project. In contrast, if the contractor charges a percentage, they will be more transparent about costs, even though, you may not have a fixed idea of your final costs.
Who are the company’s subcontractors? You should extend your due diligence to include the various subcontractors that a GC uses. If the GC’s fee is based on a percentage of the project cost, you may want to be involved in the selection of contractors, to avoid a GC choosing higher-priced subcontractors.
Finally, what is the financial strength of the company? Is the organization sufficiently liquid? To know this, you should request the GC’s financial statements. Hopefully, these tips will help you choose the right GC for your multifamily construction project.
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