How and when you select a contractor is a critical part of minimizing the risk of a construction project. Ever-increasing costs and regulations combined with technology and building systems’ complexity make selecting the right contractor critical. The right contractor, teamed with the right architect, is essential to ensure you get the building you want, on-time, and on-budget.
Traditionally, an owner would hire an architect who would oversee the entire design process resulting in a set of contract documents. The owner would invest months working with the architect, investing tens of thousands of dollars in fees. The contract documents would then be given to three or more contractors who would study the documents and submit a bid. Typically, the contractor with the lowest bid wins.
We’ll leave it to the reader to Google why the “design-bid-build” system of contractor selection often results in projects that cost too much and aren’t completed on time.
At Blueline, we are advocates of selecting the contractor as early in the project as possible. Here are three better ways to select a contractor:
1. Design/Build – This method has gained prominence over the past 40 years to the point where over 40% of all non-residential building projects are done design-build. The owner hires the contractor first and makes them responsible for both the design and construction. Some contractors have architects and engineers on staff, and others hire an architect just as they would hire another sub-contractor.
Blueline has been part of numerous design/build teams. If a contractor has a track record for successful project delivery and exceptional customer service, we don’t mind working for them. The best design/build teams include the architect in the early design process and provide them with an opportunity to interact with the client and hear their needs and expectations directly. A contractor who has demonstrated expertise with your type of project will better tailor the design/build process to your needs.
2. Construction Management at Risk – This method essentially hires both the architect and contractor at the start of the project. Sometimes the contractor is selected first and helps the owner interview and select an architect; sometimes, it’s the other way around. In either case, the architect and owner have separate contracts with the owner.
This method’s key feature is that throughout the design process, the contractor is responsible for producing budgets and schedules based on the architect’s design work. The contractor can also advise on the availability of material and the constructability of the proposed scheme. The architect then adapts the design so that the design, budget, and schedule align with the owner’s expectations.
3. Negotiated Selection — In this scenario, the owner hires the architect to develop a conceptual design. The architect develops a building program that meets the owner’s functional needs then develops plans and 3D views that illustrate design intent. The final conceptual design package should include an outline specification of materials and systems.
The conceptual design package is then given to three to five contractors who are asked to provide a non-binding budget and stipulate a proposed fee. Interviews are then conducted where the contractor is typically asked to suggest ways to save money, manage the project, minimize changes, etc. The contractor best aligned with the owner’s goals and expectations is selected to advise on cost, schedule, and constructability throughout the remainder of the design process.
Like the Construction Manager at Risk method, the architect and contractor have separate agreements with the owner.
We’ll elaborate on each of the methods more in subsequent blogs. We’ll provide pros and cons and keys to success based on our extensive experience with each method.
There is no one best way. The right way to select a contractor depends on the type of project, how well the owner knows what they need to build, and their expectations for quality, price, and schedule.
In the meantime, if you are looking to hire a contractor and want to discuss your unique situation, contact us through our website.