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Business Observer Friday, May 23, 2003 15 years ago

Selecting a Contractor

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It's almost like hiring a key employee - make sure there's the right match between you and thecontractor/construction manager. 'I can't stress communication enough,' says Tom Wessel.

Selecting a Contractor

It's almost like hiring a key employee - make sure there's the right match between you and the

contractor/construction manager. 'I can't stress communication enough,' says Tom Wessel.

By Michael Tedder and Hali White

Staff Writers

Choosing a contractor may be the most important part of the build and expansion process for a business owner, according to Alan Zirkelbach, president and owner of Bradenton-based Zirkelbach Construction. It sets the stage for the whole project.

Today, many business owners choose contractors who handle all aspects of a new building or expansion project in-house. The design/build trend began about 15 years ago and continues to gain popularity, Zirkelbach says. "We're probably 70% design/build and 30% conventional," Zirkelbach says. "Five years ago, it was 50/50."

Although his company does both, Zirkelbach recommends the design/build process, in which one firm handles everything from the design to the civil, structural and mechanical engineering.

"It becomes a negotiated bid, and everybody's on the same team," he says. "When a contractor is responsible for it all, he knows what costs are and he's dovetailing all the engineering and design work together for the costs he has agreed he can deliver to the owner."

But selecting that construction manager or contractor is not a simple process. The first step is to ask colleagues and business owners who have been through the construction process for recommendations and non-recommendations. It's just as important to find who the good contractors are as who the not-so-good ones are. If an architect has already been brought on to the project, he also is a good source for recommendations.

Tom Wessel, president of Tom Wessel Construction, recommends narrowing the search by looking for potential contractors who focus on a specialty, be it an office building or a warehouse. "A lot of contractors specialize, so contact the local building exchange for references," Wessel says. "They can be excellent in providing different types of contractors for different kinds of works."

Interview between two and five contractors before choosing, Zirkelbach says. When the choice is down to two, he says, visit works in progress by each and interview current and previous clients.

"You want to look at how much detail they put into a project," Zirkelbach says. "For instance, is there a supervisor on the site? How clean is it? How organized? Those issues represent how the contractor will implement the final project."

During the interview, try to discern if the contractor knows how to make a building reflect its owner - a key, according to Zirkelbach. And always verify that a contractor is licensed and certified. You can search the state website (www.myflorida.com) under "business and professional licenses," and then search for a license, permit or registration.

Once a list forms, double check to make sure those on it are bonded, insured and licensed. That should go without saying. Then make appointments for interviews.

When you begin meeting potential construction managers, pay attention to the person who will actually do the work, not just the company they work for, says Ken Smith, president of Dooley & Mack Constructors Inc. "Don't base your decision on marketing materials," Smith says. "The people who make the biggest mistakes are the people who don't spend enough time with the operation people and too much time with the marketing people looking at the glossy photos. You need to look past the glossy photos and look at the people. Integrity, reliability, that's the reputation you're looking for.

"The central thing is to know the people you are dealing with, not the company," Smith says.

Smith recommends talking to the potential contractor about what else he has built and for whom he worked. Check out how many buildings he has built, and then talk to his previous clients. When doing a background check, make sure the portfolio includes recent successful projects.

"Look at what they did a year ago, two years ago," Smith says, "I don't care about what they did 10 years ago."

Another factor to consider when deciding which construction manager to select is knowing whom the building owner will deal with on a day-to-day basis and whom he plans to have do most of the actual lifting and drilling. Wessel recommends getting referrals for the subcontractors as well. "The subcontractors are very impressionable on a job site, they're the soldiers underneath the general."

When checking references on a potential contractor, Wessel recommends finding out if he stayed on schedule and was easy to work and communicate with. "The relationship between the contractors, owners and architect depends on, and needs to maintain, open communication," Wessel says. "The client is often nervous about 'what I don't know,' and unless the contractor maintains and reviews the schedule with the client, there's an anxiety that doesn't need to be there.

"The most important thing for a contractor is scheduling, to maintain a constant flow of activity on a project," Wessel says. "Nothing is more upsetting for an owner than to see days go by without any work on a project."

Reputation is a good way to know what quality of work to expect, but it also comes with higher monetary costs. Wessel says that building owners trying to keep costs down should consider a less experienced contractor who shows promise but who has not had enough time to establish a lengthy reputation.

"Is it more important to have that comfort of knowing what the job will come out like?" Wessel says. "Or are you more interested in saving money by taking a chance with someone new? It needs to be a joint decision (between the owner, investors and architect)."

Finally, one of the last things to know in the interview process is whether a contractor will stay involved past the construction completion date. "In construction, there are always idiosyncrasies; owners may need education to systems or repairs," Zirkelbach says.

After meeting with and researching enough contractors to know what the options are, request bids from the top candidates. A good deal at a good cost is important, but Wessel says to be careful not to let bargain hunting overtake the decision making process. The lowest bid on a project is not always the best bid.

"Things are always price driven, but in the grand scheme of things, prices may vary 5% to 10% at most," Wessel says. "If one constructor's bid is 5% higher, that should not be the determining factor in picking a contract. Five percent may be $5,000 more, or even $50,000 more, but that's not too much for a multimillion dollar project."

The best way to save money on a project is to bring the contractor on as soon as possible and have him work with the architect to develop the building, thus making it more cost effective and flexible than simply following the architect's plan without any input, Wessel says.

"The contractor can show you a list of ways for making things more cost efficient," Wessel says. "They may ask if it matters if the locks aren't the most expensive, prestigious brand available, or if you want to cut costs on tile, and then you tell them that's fine, but you don't want cheaper tile in the lobby."

Another way to keep costs down without sacrificing the quality of work is to enter into what's called a construction manager at-risk agreement, says Smith. This is where the owner sets the maximum price before the project begins, "as opposed to bid and build, where the architect draws up the plan and about five companies bid on the project, and whoever bids the lowest gets it," Smith says. "What happens is the contractor reads the plans to find the least amount of work in a project.

"Manager at-risk protects the owner and gets him the most value," Smith says. "It's a partnership, rather than an adversarial position."

The ability to communicate with the contractor is a key to success, but make sure the lines of communication work both ways and be willing to do as much listening as talking. "With an unfriendly owner, I'll proceed as planned if they tell me 'Just build it the way it's drawn," Wessel says. "I won't offer suggestions to make it better, I'll just go ahead and do the job. I think that's a poor means of developing a project. I can't stress communication enough."

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