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Commercial general contractors are hired to build non-residential structures such as schools, shopping centers and office buildings. For publicly funded jobs, federal regulations often stipulate that the job must be awarded to the lowest bidder. While this may appear to be an effective selection method, it often fails to take into account the qualifications and reputation of the contractor. Low-bid strategies tend to be more costly in the long run in terms of project delays, conflicts or other issues. For private companies, there is much more flexibility choosing commercial general contractors.
Project owners should look beyond price during the early stages of selecting a contractor. Instead, the company should focus on the reputation and project history of each potential contractor. The references for each company should be checked and compared, and an investigation should be made into lawsuits and other legal issues. It is also important to contact subcontractors and suppliers to see how they rate each of the commercial general contractors. Subcontractors who are treated well and paid on time will generally perform better than those who have had trouble with specific companies.
Next, the financial records for each contractor should be evaluated to determine if they can complete the job. The project owner should confirm that each one has the capital and liquidity needed to meet payroll, buy materials and pay subcontractors and suppliers. It is also helpful to evaluate the credit history and bonding capacity of each of the commercial general contractors that are under consideration. Finally, the tax records of each should be examined to catch any potential problems that could delay the job.
During the average construction project, the owner will spend a great deal of time working with the selected general contractor. It is therefore important to interview key personnel from each firm to see how well you are able to communicate. Discuss your expectations when it comes to scheduling, job site safety, treatment of subcontractors and any other pertinent criteria. It can also help to gauge how much experience each contractor has with building projects similar to your, especially if your project is fairly technical or complex.
Once you've narrowed your choices, it's time to compare costs. Ask each of the commercial general contractors for a project estimate, and make sure you are available to answer their questions. You'll get a much more reliable budget if you can clarify any points of confusion. If all other criteria are fairly equal, you should feel comfortable choosing the low bidder at this point. It is critical to remember, however, that a small upfront price difference does not justify selecting a less qualified contractor, so be sure to evaluate the company thoroughly before awarding a contract.