Top 10 questions to ask a Contractor's References

Top 10 questions to ask a Contractor's References
By Luis Gile

Most people know that one of the best ways to qualify a contractor is to request references, but most never actually call. It might be that some think call a reference is a waste of time or possibly that you are imposing on the reference, but it is surprising how willing some folks are to share their experience if you simply ask. It should be noted that not every reference will be as accommodating, but even if you get one willing person, the information you can glean could be critical.

Make sure that before you call the references you are prepared with a list of specific questions. You should make sure that you ask every reference the same questions. This is the most effective way to compare references from multiple contractors.

Feel free to come up with your own specific questions, but here are ten questions you might want to ask.

Question number 1: "If you were to take on another project, would you hire the contractor again?"
This seems like a simple question that might not get you much information, but you have to listen carefully. A good deal of hesitation before their response or some qualified response should give you pause. Also, there might even be some who will honestly tell you that they would not want to work with this Contractor again even if they felt that their project was successful. Make sure to ask follow up questions depending on what they say.

Question number 2: "During your project which person from the Contractor's Company did you interact with the most?"
The goal of this question is to get a sense of who you will be dealing with during the project. Many times a Contractor has different folks that handle different parts of their business. This is not by itself a concern, but if the reference tells you that they mostly dealt with someone other than the person you have already met, you might want to go back and confirm who that person will be and meet them yourself. A construction project is a long term relationship. If you are not comfortable dealing with a particular person, you should reconsider awarding them the work.

Question number 3: "Would you say that the job site was kept in a neat and safe manner throughout the construction?"
Now we are getting to the heart of the matter. This question starts to explore how well the Contractor manages the job site. Keep in mind that you will be living with whatever mess the Contractor leaves behind at the end of each work day. Obviously this is a lesser concern if you are building a new house on a plot far from where you live, but even in such cases, the neatness of the site is closely tied to job site safety and that can represent a risk for the Owner.

Question number 4: "Were there any accidents during your project that caused damage to people or property?"
Similar to question number 3, it is important to know how safety conscious the Contractor is. Asking about accidents is a very specific way to understand how the Contractor manages the job site. If the reference tells you that there was some kind of an "incident", you need to follow up with, "Tell me how the GC handled the incident?". Listen carefully. You should hear that he stopped the work, contacted EMS, secured the job site, and implemented some kind of corrective action. Accidents happen, so don't automatically disqualify someone over this. The way they handle such matters can sometimes be as important as what they did to avoid an accident.

Question number 5: "During your construction project did you have any disputes over invoices? if so how were they resolved? "
The response to this question will give you insight into a couple of things. First it gives you an idea about the contractor's billing practices and second it tells you how easy the contractor will be to work with. It is common to have differences of opinion when it comes to how much is due on a construction invoice. The reason for this is because a contractor's invoice should be based on what percentage of work has been completed. No two people (especially an Owner and a Contractor) will ever agree on the percentage of work complete. The Owner usually thinks its much lower and the Contractor usually thinks it's much higher. So invoice disputes don't automatically equal "bad contractor". However, a Contractor should compromise somewhat with the Owner when there is a dispute. Also, the contractor should have all his back-up documentation available so that the two can sit and review what is due. An owner should never feel that they overpaid or were bullied into paying more than they felt was fair. If the Contractor has all of his ducks in a row, they should be able to justify everything on their invoice.

Question number 6: "Was the contractor present during inspections from the building department?"
To me a "No" response here would yield a "NO-GO" decision about hiring this contractor. There is nothing more basic and simple than being there for inspections. This is not the Owner's responsibility and any contractor that chooses to not be present during an inspection should not be considered.

Question number 7: "Did the contractor provide you with a construction schedule? If so, were you kept up-to-date with schedule changes?"
This is important because without a schedule your project could seem like a never ending saga. Even if you have already requested a schedule from your contractor, knowing whether the contractor makes a practice of providing a schedule for other Clients will give you insight into how well organized and communicative the contractor will be during your project. The second part of this question is also important. Updating schedule changes is critical to managing a construction schedule. Knowing whether you can count on that for your project will give you peace of mind.

Question number 8: "With respect to changes to the work that affected the cost of the project, would you say that the you were well aware of the scope and the cost of all changes before the work was done?"
A good contractor should never perform any additional work without making sure that the Owner has agreed to the changes and approved any additional charges. If the reference does not give a definitive "Yes" to this question, beware.

Question number 9: "How would you characterize the contractors response to questions you might have had on change orders?"
All too often, contractors get defensive and uncomfortable anytime they are questioned about change orders. A grounded professional with nothing to hide, will not. You should be able to sit down with your contractor and review every item on a change order. If the reference suggests that the contractor was evasive or failed to clearly communicate about change orders, you should be concerned.

Question number 10: "How did you find this contractor?"
This question is really just to make sure that the reference you called is not a relative or close personal friend of the contractor. If they are in any way related to the contractor (other than professionally) you should consider this to be very weak reference and you should be suspicious of anything they said about the contractor.

Those are some of the questions that I recommend asking references.

Feel free to add to these or ask follow up questions depending on the responses you get. In all, I would say that your time on the phone with each reference should be less than 20 minutes. If you take any more time than that, the reference may start to feel imposed upon. Regardless, make the call, you are bound to get some good information.

Have you made a call to a reference? What key questions did you ask? How useful would you say calling a reference was in your decision making?

About my blog
This Blog is designed to help small business owners and residential homeowners manage their design and construction project more effectively. My goal is to communicate the best practices of design and construction and arm you with information to help avoid common mistakes.

About Me
I am a Registered Architect with over 20 years of design and construction experience. I enjoy working directly with Owners to help them meet their goals and objectives.

Disclaimer
I am solely responsible for the content of this blog. None of the Clients or Companies with whom I am affiliated take responsibility for or endorse the comments, ideas, and concepts that I communicate here.


You can find out more about me on www.luisgile.com.

What are the phases of work of a typical project

What are the phases of work of a typical project
By Luis Gile

No matter how big or small, all construction projects follow the same basic phases of work. Spending an appropriate amount of time (relative to project complexity) at each phase can mean the difference between the success or failure of your project. If you try to skip a phase or fail to perform the proper due diligence, you could loose time and money in a latter phase.

Below are the phases of work every project should follow. Each phase should have it's own milestones or sub-phases as well.

Phase Number One: Pre-design

The first phase of a construction project is called the Pre-design phase. This phase of work is meant to answer the question, "Can you build?" During this phase, you need to perform some due diligence to avoid committing to work you are unable to complete.

During pre-design, you should be evaluating your job site to validate your buildable area. Your buildable area will be dictated by your local zoning regulations. Zoning regulations are different than building codes. Zoning regulations limit the buildable area of a lot by requiring set-back from front, side, and rear yards. These regulations also limit the height of a building and the amount of land you can cover with impervious surfaces.

During pre-design phase you also need to define what you want to build. Some people refer to this as the Programming Phase. Your project program should answer the following questions:

1. how many rooms do you need?
2. how many people are you trying to accommodate?
3. what amenities do you want to have?
4. What are your storage needs?
5. What size rooms do I need?

Once you have documented the program you have in mind, and you have a handle on the approximate square footage of what you want to build, do a test fit on your buildable area to confirm that you can fit your program in the space you have. If it doesn't fit, you'll have to reconsider your program.

Pre-Design is also the time for budgeting. Once you have the approximate square footage you need, find out what the cost per square foot for construction is in your area and do the math. Multiply the square footage of your program by the cost per square foot to build. This will give you a ball-park idea of what your construction cost might be. Remember to add costs for design services and please make sure to include at least 20% in contingency.

Phase Number Two: Conceptual Design

After you have validated that you can fit your program on the project site and that you have the funds to build, it's time to develop a concept plan.

A concept plan is a basic design of what you want to build. Concept plans should include very few details. You can add notes to cover details that are intended in certain areas, but don't spend time designing details. Focus on big picture items like function, flow, and form of the space. This is not the time to choose tile or select paint colors, that will happen later.

Spend as much time in this phase as possible to ensure you have a design that you are happy with. This is the time to explore ideas and consider options. It will be far more cost effective to make changes to your design in the conceptual design phase than in any future phase of work.

It is especially important not to skip this phase before jumping into Detailed Design because you will need a concept plan to solicit pricing for the detailed design phase.

Phase Number Three: Detailed Design

This phase of work is where the Architect will spend the majority of their time. During detailed design the concept plan will get refined and the details of the project will get fleshed out. During this phase you will identify the types of building systems your project needs and identify the finishes for each room.

It's best to break up this phase into multiple milestones of design. Typically these milestones are broken down by level of completion. You should make sure to review the drawings at each milestone to make sure that the design is developing the way you want. Typical milestones are;

1. Schematic Design 30% complete,
2. Design Development 60% complete,
3. Construction Documents 80% complete,
4. Final Construction Documents.

The final construction documents should include sufficient information for bidding, construction, and plan approvals.

Phase Number Four: Pre-construction

Just as there is a need to prepare for design we also need a phase to prepare for construction.

During pre-construction you need to plan the construction work. No, you are not planning the means and methods of the work. This is the contractor's job. Your planning should focus on phasing, financing, and site logistics.

Look at the project and think through any phasing you might have for the work. Project phasing can be driven by any number of considerations including cash flow, logistics, or permitting.

Refine your construction budget. At this stage you will have the final square footage of your building and you may even have certain finishes or specialty items selected. Use this information to refine your budget and confirm that you can commit to the funding needed for construction.

Plan your cash flow. If you have all of the money for your project in the bank, all you need to consider is how much cash will you need at each payment milestone. If you are using some form of financing or you have a bonding company, you should sit down with them to talk through cash flow and make sure you know what documentation you need in order to make a payment to the contractor.

It's important to know these things ahead of construction so you can communicate clear payment terms (in your contract) to your contractor. Don't wait until after the work begins to discuss payment terms. Nothing creates greater tension between an Owner and a contractor than unmet payment expectations.

Logistics of construction means a lot of things, but primarily you need to consider whether you can still live in the home while work is ongoing. You may be able to phase the work so you can continue to live around the area of work. Let the GC's know your plans so they can plan to work around you. Phasing does impact cost, so be careful not to create a very complex plan. You may find that paying for temporary housing may be more cost effective. You also wont have to tolerate the noise and mess of a construction site.

When you consider logistics also think about where the GC can store materials, how deliveries will work, and where construction vehicles and dumpsters can go. The best case scenario is that your property is large enough to accommodate these things, but if you plan to use the street for such purposes your town may require you to have a special permit. The GC should have the responsibility to pull all permits, but you need to be aware of local requirements so you can communicate them to all of your bidders.

Finally, this is the phase for you to solicit quotes from General Contractors.

Phase Number Five:  Construction Phase

This is the phase where all the construction work gets done. Typically, this is also the longest phase of all. This is also the phase of work that costs the most money.

Everything we have done in the previous phases is meant to reduce risk in this phase. That is why it is important not to skip any of the previous phases.

Skip (or hurry through) any of the previous phases of work and you are likely to overpay for this phase.

Mistakes during construction cost a whole lot more than mistakes in any previous phase.

You will play a key role in this phase of work. Plan to meet with your GC regularly (typically once a week). You may be asked to approve materials and finishes, and you should be receiving payment applications for review prior to receipt of an invoice. There will also be change orders to review.

This phase is not over until the project close out. Project Close out is a milestone in construction which signals that the work is complete. During project close out your contractor should provide you with any warranties for equipment and materials installed in the house. There may also need to be a formal close out with the bonding company (if you required a bond). You also should do a final inspection before you accept the GC's final payment application and make sure he corrects everything on your list and hands you all of the documents before you release the final payment.

When I run a project, I include a separate phase of work for procurement of design and another phase for procurement of construction. This isn't essential just as long as you take the proper time to have a proper bid period.

Construction projects can be very risky, but if you organize the project using these phase of work and you spend the time to do the proper due diligence at each phase, the risk can be greatly reduced.

Keep in mind that for each phase of work will have sub-phases or milestones inside them. Some will be longer, some will be shorter, but none should ever be skipped.

I hope you found this topic useful. Tell me about your construction project. How did you split up the work? Did you skip any steps and realize your mistake later on? Tell me your experiences.


About my blog
This Blog is designed to help small business owners and residential homeowners manage their design and construction project more effectively. My goal is to communicate the best practices of design and construction and arm you with information to help avoid common mistakes.

About Me
I am a Registered Architect with over 20 years of design and construction experience. I enjoy working directly with Owners to help them meet their goals and objectives.

Disclaimer
I am solely responsible for the content of this blog. None of the Clients or Companies with whom I am affiliated take responsibility for or endorse the comments, ideas, and concepts that I communicate here.

You can find out more about me on www.luisgile.com.

The top 5 mistakes that homeowners make when they bid out their construction projects

The top 5 mistakes that homeowners make when they bid out their construction projects
By Luis Gile

When people think about a home improvement project, they either think about the design or the construction.  They rarely consider that the bidding phase might be the most important phase of work.  In fact, most people don't even think of the bid as a unique phase of work.  They think that you just call someone on the phone, hand them the drawings, and get a price.

A homeowner can adversely affect their project in more ways during the bid phase than during any other phase of work.  Here are the top 5 mistakes that I see homeowners making when they solicit a construction bid.

Number One:  Failing to solicit enough bids. A small pool of bidders hampers your ability to negotiate.  I like to make sure that the pool of bidders is large enough that even if some contractors opt out, I still have at least three viable bids.  The phrase "viable" means that you should be able to exclude any outliers (bids that are significantly higher or lower than the majority of quotes) and still have three options.  My goal is always to have a minimum of 4 bids.  In order to meet that goal you have to start with at least 6 to 8 viable contractors.  Any less and you will be likely to end up with less than 3 bids.

Number Two:  Having a poorly defined scope of work. Proper scope definition is probably the most important consideration when soliciting quotes.  This is true for both design and for construction.  Poor scope definition is the number one reason for change orders and for delays in the work.  You might be thinking that scope definition is the responsibility of the Architect.  This is true to a certain extent, but Owner's have much more influence over scope definition than they think.  I will be posting a separate blog to address "How an Owner can Influence Scope Definition"

Number Three:  Failing to request information about the bidder's qualifications. When soliciting bids, most people focus their attention on the cost.  Rarely are the qualifications of the bidder considered.  Failing to ask the right qualifying questions or failing to confirm that the contractor is qualified (i.e. licensed and insured) to do the work is a recipe for a failed project.  The contractor that offers the lowest price is not always the best contractor and the difference between a good contractor and a bad contractor is huge.

Number four:   Not having a formal bidding process.  Another major mistake I see homeowners make is not having a formal structure for soliciting a contractors price.  Having a formal structure for soliciting a price means that you start the bid at the same time and end at the same time.  It also means you control the communication between yourself and the bidders to make sure that all of the bidders have the same information at the same time.  This is important because if any one of the bidders has more time or different information that bidder may either have an advantage or a disadvantage over the others.  If this happens, then you will be unable to compare the bids evenly.

Number Five:  Failing to request pricing in a specific format.When you request a construction quote, you have to think ahead to how you will compare the bids.   Consider that you will be receiving three, four, maybe five bids from separate contractors.  Each of them will have their own way of developing their price and each of them will want to give you their price in their format.  In order for you to be able to compare the bids, you will have to review and interpret each bid in a common format.  This can often be difficult because some contractors will give you more detail than others and you might not have enough information to compare all the numbers.  This could lead to awarding the work to someone who has missed or underbid major portions of the scope.

So there you have it, these are the top 5 mistakes I see homeowners making when they solicit pricing from a contractor.  Be careful not to make these mistakes and you will end up with more viable options and you will be better able to identify the best contractor for your project.

Tell me your bid stories.  Did you have enough viable bidders?  Were you able to compare the bids?  How did you make your award decision?

About my blog 
This Blog is designed to help small business owners and residential homeowners manage their design and construction project more effectively. My goal is to communicate the best practices of design and construction and arm you with information to help avoid common mistakes.

About Me
I am a Registered Architect with over 20 years of design and construction experience. I enjoy working directly with Owners to help them meet their goals and objectives.

Disclaimer
I am solely responsible for the content of this blog. None of the Clients or Companies with whom I am affiliated take responsibility for or endorse the comments, ideas, and concepts that I communicate here.
You can find out more about me on www.luisgile.com.

Should I hire a project manager for my home remodel?

Should I hire a project manager for my home remodel?

By Luis Gile

A construction project is one of the most difficult and costly challenges anyone can undertake.  With so many choices to make and so many people to manage, the entire process can be very overwhelming.   

Hiring a Project Manager (PM) can alleviate some of that stress.  It's best to engage the PM very early on (even before you have a design).  The PM can be by the Owner's side acting exclusively on the Owner's behalf through every phase of work.  The PM's role is to bring order to the project and to provide expert advise on technical, contractual, and financial matters of the project.

Your project may include several other professional service providers including Architects, Contractors, and maybe even Lawyers and Accountants, but each of them have boundaries of responsibility.  A skilled PM can address each step of the process and fill the service gaps that exist between each of the other professionals.  

In this article, I point out some of the advantages of hiring a Project Manager.  There may be other benefits as well and your PM may have certain strengths and weaknesses, but the advantages of having a PM on your project will certainly benefit the project in the long run.

Number One:  Organize your thoughts 

Before you are ready to start your project, you may need someone with whom to discuss your ideas.  During early stages of project conception, you'll have lots of thoughts and ideas.  A PM can help you narrow down your choices and hone in on the best ideas.  The PM can also help document your thoughts so they can be presented in clear industry specific terms to others.  This documentation is critical to getting off to a good start on your project.

Number Two:   Identify a good Designer

When selecting a designer for your project, it's not enough to search the word "Architect" in your web browser or look in the Yellow Pages under "designer".  You need to have industry knowledge to sort through the hundreds of firms and sole proprietors to narrow down the pool of choices.  Then knowing what questions to ask and how to interpret the responses is a critical skill for qualifying a firm.  A Project Manager can help with all of that.  Your PM can then also help negotiate your design contract to ensure you are getting the best value.

Number Three:  Turn your design into Construction Documents 

Most of the time the amount of documentation and information that you get from design drawing isn't sufficient to move on to construction.  Those pretty pictures and 3D renderings need to be converted to Construction Documents.  Construction Documents communicate to the General Contractor your design intent and allow you to solicit construction pricing.  It may be necessary to have a separate agreement for your design drawings to become construction documents.  You may even need a different Company to execute the Construction Documents.  If your designer isn't able to supply you with Construction Documents or your agreement did not include Construction Documents,  you may be left holding a beautiful set of renderings, but not be any closer to building your dream.  A PM will anticipate these issues and help you to decide the best option for converting your design documents into construction documents.

Number Four:  Objective Professional Advise

During the design process you will have hundreds of decisions to make.  Many of these decisions will have long-term impact on your project.  Some decisions will impact price, other decisions will impact functionality. In either case, having an experienced professional (other than your designer) by your side to consult with on key decision will give you the confidence to move forward.  Whether you want to act boldly or you want to mitigate risk, the objective professional advise of a PM will keep you on the right track.  

Number Five:  Know when a Change Order is legitimate  

Whether you are in the design phase or the construction phase, you may have to consider requests for additional fees.   Design changes and unknown conditions of the site are the most common events that trigger requests for additional fees from Architects and General Contractors.  A PM can help you discern when a  request for additional fees is legitimate and when it is not.  The PM can also negotiate on your behalf to ensure that what you pay on Change Orders is reasonable. 

Number Six:  Choosing the right Contractor 

Choosing the right contractor requires objective consideration of both qualifications and price.  For obvious reasons, Owner's always want to rationalize an award to a low price bidder.  Price-based decisions are generally not favorable.  Owner's need an experienced professional who will implement a rigorous objective system to help them make award decisions.  An experienced Project Manager will know how to implement such a system and will help guide the Owner in structuring an evaluation process.

Number Seven:  Define a Project Execution plan 

There are a number of ways that a project can be executed.  These are often referred to as delivery models.  Each delivery model has certain nuances and considerations that can have long term implications on your project.  An experienced Project Manager will listen to your specific goals and will recommend a plan that suits you.  The Execution plan you choose may impact the Architect and General Contractor you choose.  The Execution plan will even impact which contract and pricing models you use.  This is a critical step that is often overlooked and should not be taken on without professional advice.   

Number Eight:  Choose the correct pricing option 

Most Owner's probably don't know that there are multiple pricing options to choose from.  Depending on your circumstances a fixed price (or lump sum price) may not be the best choice.  A full assessment of your scope of work together with an honest discussion about your ability to make decisions should precede any decisions about pricing options. 

Number Nine:  Construction Management 

Even after you have hired the General Contractor, there is still a great deal of project management to be done.  There will also be invoices to review, schedules to manage, consultants to coordinate with, and contracts to manage.  All of these require experience and know how.  Without a PM, these duties will rest on the Owner and without a background in construction, these tasks may seem overwhelming.  

Number Ten:  Final payment and Project Closeout 

At the end of every construction project there is a list of critical tasks that the GC should perform before he receives his final payment.  If you release final payment before everything on the list has been satisfied, it's unlikely to happen.  Your PM can confirm that everything has been completed before he releases (or advises you to release) the final payment.

These are just a few of the reasons why an Owner should not undertake a project without a Project Manager.  Project Managers have the experience and the know how to help navigate the complex issues that existing in every construction project.  From technical issues to contract issues, you need to have an independent professional working for you to advise you every step of the way.  A PM contracted directly to you as your agent will represent your best interests through every phase of work and will bring the oversight needed to make your project a success.

About my blog
This Blog is designed to help small business owners and residential homeowners manage their design and construction project more effectively. My goal is to communicate the best practices of design and construction and arm you with information to help avoid common mistakes.

About Me
I am a Registered Architect with over 20 years of design and construction experience. I enjoy working directly with Owners to help them meet their goals and objectives.

Disclaimer
I am solely responsible for the content of this blog. None of the Clients or Companies with whom I am affiliated take responsibility for or endorse the comments, ideas, and concepts that I communicate here.
You can find out more about me on www.luisgile.com.