Assuming that a design has been produced; then what’s next? If a licensed contractor is needed and a strong word of mouth referrel hasn’t occurred yet, you will need to attain a list of 3-4 contractors that you would feel comfortable working with to bid on your project. Commercial bidding and contract law has a fairly regimented process; however, there is not as near a rigid set of rules for residential work, generally speaking. Everyone should get clued into local and state contract law, but you are literally free to choose your own medicine. Sometimes architects will take the lead and choreagraph the process, and in others, the homewoner will lead the process. So, what is this process and what are some of the critical issues/items? Please see the below for a few helpful tips for the owner and contractor:
· Try to be as specific as you can on your plans, scope of work, and specifications. If exact items have not been selected, use practical allowances for items such as tile, cabinets, countertops, etc.
· Announce special considerations for scheduling, special needs of family members, typical jobsite management desires, and supervision/mamangement.
· Specify who does all of the purchasing and who will be involved with decision making (very important for timing).
· During the bid phase, the contractors should have a visible “due diligence” period and many of their sub contractors should visit the job site (remodels are particularly important).
· Architects typically use a form or schedule called Schedule of Values. This can be used in a more simple spreadsheet format for smaller projects, but it defines every scope of work item involved in the project and it precludes missed items and will highlight inappropriately priced items.
· Impose a deadline for bids to be submitted instead of leaving things open-ended. Addendums and alternate pricing items published during the bidding process can confuse everyone. Unless there is a glaring design change/need, try to stay the course on the original bid items and negotiate the addendums and alternates with the contractor of choice. The pricing should be fair and still at an arms length distance.
· Once you have vetted out the contractor of choice, both the owner and contractor need to negotiate on contract terms, pricing variables, payment schedule, conduct of the project, overall schedule, identify the whole build team and what everyone’s roles are, and finally contract.
· A pre-construction meeting should be held prior to mobilization to be sure everyone is still on the same sheet of music. Special order items that have long lead times are purchased as soon as is practicable. There should normally be material acqusition reports and project management software that track day to day scheduling and material purchase orders.
· Surveys, variances, and permits are completed and all pre-construction paperwork gets wrapped up. Everyone should be licensed and insured. A system should be in place to frequently validate general liability insurance, Builder’s Risk Insurance, Worker’s Compensation Insurance, and any special “Floaters”.
· Normal sequencing occurs with weekly reporting to troubleshoot the project progress. A open channel of communication is essential to preclude alienation between the owner and contractor. It is hard to re-connect once relationships begin to sour during a typically stressful endeavor!
· Keep a handle on reporting, cash flow, and job site cleanliness. This all affects the general health of the project. Be very accountable of materials on site and make a visible effort to maintain a safe and secure jobsite.
· Always have a good plan for punching out timely and efficiently. Talk and write about it often and increase project intensity at the end of the project to guarentee a good completion. Manage cash flow and retainage so that both the owner and the contractor aren’t at odds the last couple of weeks of the project.
1. National Association of Homebuilder’s (NAHB.com)