Choosing a general contractor can be difficult because bid methods and bid outputs are often dissimilar. In addition, many of the aspects that make a contractor desirable to work with are not measurable nor included in the bid. We recommend a process for evaluating and comparing different contractors for your home build and defending against hidden costs. The process involves:
- Break down the bids into comparable scope sections
- Compare Pricing
- Examine outlying scope section bids for red flags
- Look for errors/omissions
- Evaluate overall bid quality & accuracy to the construction documents and specifications
- Evaluate their credentials
- Evaluate their references
- Determine your ability to have a productive working relationship
For an owner, choosing the right contractor to build your new home is among the most important decisions you have to make. But before engaging anyone, you need to do your due diligence to ensure that your contractor will deliver what you want with the least hassle possible. For that, you’ll need to collect several bids from various general contractors and evaluate them in an unbiased manner.
Even if you give all the bidding contractors the exact job specification for your project, including the house plans, list of materials, and product names, their bids won’t all be the same because they'll use different estimating methods and outputs. Sometimes, the differences between bids can vary significantly, especially in the price quote, completion timelines, and scope of work.
That’s why you need a method for comparing dissimilar bids. Your task will be comparing contractor bids and choosing the most suitable one for your needs. But how do you do that to ensure that you cover all the loopholes and identify the most suitable contractor to build your home?
When evaluating bids, here’s what to look for to choose the best contractor for your project:
Is the bid well detailed and shows the contractor understands what you need?
Does the scope of work match the construction drawings or are their omissions?
How are material/equipment specifications handled? Are the costs quoted accurately or are they listed as allowances?
Is the price reflective of the entire build?
What does the pricing say about change orders and are they part of the pricing or charged separately?
A low bid might either be a red flag about the quality or an error / omission in scope.
A high bid might indicate the contractors' inexperience or unwillingness to do that part of the scope.
- Are there obvious or seemingly careless errors and omissions?
- How have they interpreted your specific requirements?
- Has the contractor put together the bid in a professional manner?
- Does the bid show that the contractor took time to put together a custom bid or did they copy items from other projects?
Relevance: Check how the bid fairs against your requirements, specifications, and house plans. The contractor should have done an excellent job capturing your project and presenting it clearly and concisely.
Accuracy: This is a crucial consideration as it can be a source for many conflicts. Ensure that every ‘t’ is crossed and that every comma and decimal point in figures is in the right place. Also, look at the material selection the contractor has picked to ensure they match what you wanted. Note that the most comprehensively written bid is the closest depiction of what to expect when building commences.
Authority: How does it feel when going through the bid? A reasonable bid should exude authority in the contractor’s capacity and capability to deliver. This includes experience and expertise in the building and construction field, as well as their experience in dealing with similar projects to yours.
Is the bidder a holder of all the required state/local certifications, licenses and bonds?
If your project requires special certifications, such as LEED, does the contractor have them?
Is the contractor a member of any professional body, trade organization, or union?
Putting it all Together:
Evaluating general contractor bids for your building project is a complex process that requires careful attention to detail. You also need to conduct an in-depth examination of what each contractor includes in their final bid price. Consider the facts and information each contractor has to offer and ensure you’ve cleared up any lingering doubts before making a final decision
The last thing you want is to have your project retouched after completion, delayed because the contractor couldn't complete the work, or couldn't keep up with the set timeline. So, make sure you have all the facts and can easily compare the advantages and disadvantages of one contractor over another. Selecting the right bid that’ll keep your project running safely and smoothly may require some extra effort upfront, but this will save you time and stress in the long run.