Choosing a Contractor
Updated: Nov 7, 2019
I’m often asked by clients if can recommend a suitable contractor for their project. I want to touch on a few of the considerations that go into my decision about who to recommend.
First, let’s understand the “Iron Triangle” of Budget, Quality, and Time (choose any two).
This means that it is impossible to get all three, e.g.
-if you want a Quality job done on a tight Time schedule, you will have to Budget more money
-if you want a high Quality job done on a tight Budget, you will have to allow more Time
-if you have a tight Budget and Time schedule, you will have to accept lower Quality.
So, the first decision to make in choosing a contractor is deciding where you fall on the triangle. Some contractors do higher quality work, some are more expensive, and some are faster. It’s important to understand what a contractor does to evaluate what you need. Contractors “contract” out most of the work to subcontractors, and manage the scheduling and payments to the “subs”. On a typical addition/renovation project, the contractor may sub out the excavation, foundation, framing, insulating, electrical, plumbing, HVAC, roofing, plastering, tiling, finish carpentry, and painting. Or, some contractors may perform some of the sub work themselves, like carpentry and tiling. In any case, on larger projects the contractor’s main job is ordering materials/fixtures, and scheduling and supervising subcontractors.
Most scheduling problems/delays occur because a subcontractor does not start the work on schedule, which then delays the entire project. Larger contractors may have more leverage with subcontractors because the subs get more work from them. For example, if a large contractor demands that an electrician work on a particular day, the electrician may leave a smaller contractor’s project to perform the work for the larger contractor.
Delays can also occur because materials or fixtures were not ordered with sufficient lead-time. This can be a problem with small contractors who are working on the job during the day and don’t have time to do the ordering.
The next decision is evaluating the contractor’s capabilities in two areas, “process”, and “finished product”. Process refers to both on-site items like scheduling, and off-site tasks like billing and accounting/reporting. Contractors with a bad process can still produce an excellent finished product, and contractors with an excellent process can do bad work. So, while the quality of the end product is not guaranteed with any particular type of contractor, a larger contractor will generally provide a smoother process. Contractors generally come in three sizes:
1) Guy with a pickup truck- a sole proprietor or partnership, where the contractor also does the actual work.
Pros: most cost-effective, as you are not paying for overhead. Less chance of miscommunication as you are dealing directly with the person doing the work. Expertise- the person with the most knowledge is doing the work
Cons: often poor scheduling, limited leverage with subcontractors, sometimes forget to order critical items, often slow in accounting for change orders
2) Small company- does one or two projects at a time, often one of the principals is the project manager and is on site most of the time.
Pros: cost-effective, limited overhead
Cons: average sub leverage, may not stay on schedule if spread too thin
3) Large company- does three or more projects at a time
Pros: most sub leverage, good bookkeeping and back-office support, more likely to stay on schedule by adding more people or pressuring subcontractors
Cons: pay extra for bureaucracy, sometimes jobs run by lower-skilled “lead carpenters”, miscommunication can occur because of hierarchical structure, don’t always get the “A” team.
The bottom line is to think carefully about the Iron Triangle and decide what is most important to you.