Guide for Managing Contractors to Meet Goals, Budgets, and Deadlines

Does the thought of embarking on a construction or renovation project at your home or business send chills down your spine?

Have you heard horror stories of projects running behind schedule and over budget, or worse yet, never finished? For most people, the process of locating, interviewing, selecting and managing contractors is well out of their safety zone and into the realm of nightmares.  How then, should you go about this daunting task?

What Type of Contractor do You Need?

First of all, let’s define what type of contractor will be needed and how much involvement you should expect.

Subcontractors

As a general rule, subcontractors provide individual services in skilled trades, and will not provide overall project oversight and supervision.  Subcontractors may be specialized in plumbing, electrical, framing, concrete, drywall, painting, flooring, trim carpentry, etc. Some will require a professional license and some will not.

General Contractors

A general contractor (GC) may have various areas of specialties or licenses, however, they will also provide project coordination, oversight, and supervision.  One general contractor can be hired to oversee all of the plans, specifications, permits, materials and labor needed for the entire scope of the project.

Which do I need?

How do you know if you need a general contractor or individual subcontractors?  The answer to this question is completely dependent on your specific project, your personal knowledge, and the time you have to allocate to the project.

If the project is very limited in scope, and you have the time and experience necessary to provide oversight, you may be able to get away with hiring and managing an individual subcontractor to complete the work.  This would include limited projects such as painting a bedroom, changing a water heater, adding a light fixture, etc.

If the project is extensive and requires the procurement and management of a variety of subcontractors, such as finishing a basement, your should definitely consider hiring a general contractor.  A complex project can easily require the acquisition, coordination, and oversight expertise of many skilled subcontractors.

In addition to managing subcontractors, the general contractor will manage the construction plans, permits, and material acquisition.

Regardless of the contractor hired, it is imperative that they have the appropriate licenses and insurance, otherwise, you may be putting yourself at risk.

How do you select the right contractor?

This Old House general contractor Tom Silva, offers Top 8 Pro Tips on How to Hire a Contractor:

  1. Get recommendations
  2. Do phone interviews
  3. Meet face to face
  4. Investigate the facts (look at current and former projects)
  5. Make plans, get bids
  6. Set a payment schedule
  7. Don’t let price by your (only) guide
  8. Put it in writing

Identify contractors who satisfy all project requirements

As with any industry, not all contractors are equal.  Some specialize in residential new construction, some in residential remodeling, some in commercial construction, and so on.  Some contractors may also specialize in certain areas, price ranges, construction materials, or even styles.

Personal references can be more honest and accurate than online reviews

Collecting personal references from reliable sources is still one of the best ways to identify, and differentiate between, qualified contractors.  These references may come from friends, family, or even networking groups.

Beware of online reviews and online ranking sites!  While some valuable information can be obtained online regarding contractors, there are many “pay to play” sites whose ranks reflect the amount paid by the applicant. In other words, after paying the site, the  contractor magically appears on the approved list or rises in rank.

One compromise that combines the speed and reach of online sources, with the reliability of personal references, is a post to your connections in social media platforms.  A simple request for a good contractor in your personal Facebook or LinkedIn pages, for example, can provide some very valuable information.

Get competitive bids

Value can be defined as what is received for what is paid.  A low priced bid with low quality work is of little value. A high quality bid at over inflated prices is again of little value.

The key to evaluating two competing bids is to ensure that the bids received reflect the exact same services and materials.  This can only be accomplished if the project has a well-defined scope and specifications. A well-defined scope of services should include detailed construction plans with drawings, as needed, for clarification.  Specifications should include an identification of the materials to be used, or a budget allowed, where selections have not yet been completed.

Evaluating the quality of work provided by the responding contractors may require a review of previous project work, as well as an interview of previous clients.

How do you keep on budget and on schedule?

Now that the contractor has been selected, what can you do to keep the project on budget and on schedule?  Every project has the potential for issues, however, some of these issues can be avoided or at least minimized with proper planning and strategy.  The more complex the project is, the more potential for budget and scheduling issues. Here are some tips for keeping a project on budget and on schedule:

Have selections made and a materials timeline set prior to the start of the project.

Not all materials are available on short notice.  Cabinets, for example, may take weeks or even months to produce and can vary greatly in price.  It is crucial that all project materials are available when the contractors are ready for those materials.  In some cases, the non-delivery of materials can bring an entire project to a standstill. Contractors cannot sit in waiting for material delivery, so they will move onto other project sites.  Depending on the other project timelines, this can cause an extensive delay waiting for the contractors to become available. A delay in one contractor can also cause a delay in every other contractor in the project workflow.  Therefore, it is imperative to make all selections and ensure that the availability of the materials meets necessary project deadlines.

Contractors will often have relationships built with particular vendors.  Their reasons for using certain vendors may include quality of materials, reliability of on-time deliveries, or financial advantages for their clients, or themselves.  It is not necessary to interject yourself with every vendor selection, but it is your right to ensure that you are not overpaying for materials.

Keep project plans and scope clearly defined.

A common mistake that home or business owners make when building or renovating is beginning a project without clearly defined plans and specifications.  This causes confusion for the contractors and delays in completion. Deviations in project plans are referred to as change orders. Change orders can cause project delays and additional costs, therefore, it is best to eliminate or minimize these as much as possible.  A contractor with a clearly defined set of plans is better able to coordinate all necessary materials and labor for the project, which is essential in their ability to set and maintain the schedule and costs. Project coordination can be very challenging depending on the complexity of the labor and materials needed.

Set a budget for the overall project and stick to the budget.

It is not uncommon to make selections in that exceed your set budget.  Contractors often get blamed for budget increases that are entirely in the control of the consumer.  The better you are at minimizing change orders and making selections within the preset limits, the more likely the project will be completed on budget.

Understand circumstances that are out of anyone’s control.

Depending on the nature of the project, there are factors that can affect both the budget and deadline that are not foreseeable.  Weather, material shortages, and hidden property defects are a few examples of issues that cannot be forecasted, but can still play a major factor in budgets and deadlines.

While there is no way to completely guarantee that there will not be issues with the contractor, the budget, or the schedule, detailed planning and strategy by the consumer will have an immense impact on the overall success or failure.