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The Ins & Outs Of Choosing A Great Contractor

It’s so important to find the right contractor, but where to start? After years in the industry, we’ve identified a series of guidelines to help you make the best decision possible.

When starting the conversation with potential contractors, here are some key questions to ask.

  1. How long has the contractor been working with this organization?
  2. Has he done jobs similar to your intended project?
  3. Has he had any complaints or conflicts with clients? (Here you can also check with the Better Business Bureau)
  4. How is the company’s line of credit? Are they up-to-date on their bills? What is their normal pay cycle after billing? Can the job be completed with a standard 10% retention on all bills? Can they provide lien releases with each progressive payment? Will they give you an Unconditional Release after the job is completed? (This is really important because even with a contractor, you’re legally responsible for all bills related to the job)

If all goes well so far, it’s time to ask for references. It’s important to hear a variety of feedback before committing to a contractor to ensure the best work environment. We recommend hearing from multiple people over a period of at least two years to guarantee consistent high quality work.

References!

  1. Architects
  2. Material Suppliers
  3. Property Managers
  4. Past Clients
  5. Specific references for the Site Foreman and Project Manager. They will be working with you throughout the project, and it’s important to feel good working with them.

Now it’s time to confirm the credentials. These documents can give you clues to make the most informed decision possible!

  1. The Contractor’s Qualification Statement comes highly recommended by the American Institute of Architects and The Association of General Contractor’s of America to better gauge how qualified your potential new contractor really is. It asks a series of detailed questions to help you understand more about the contractor.
  2. Get the License number! Make sure it’s current with no complaints. You can do that by calling the State of California License Board. There you can also see if the contractor’s license covers the work you’re asking. Finally, be sure to make sure all the information from the contractor matches the information from the License Board.
  3. Workers Compensation Certificate-Proof of current coverage is absolutely essential! Also find out their ‘Modification Rate,’ which tells you how safety-conscious the contractor is. 1.0 = average safety, and less than 1.0 is even better!
  4. Get a Certificate of Insurance to make sure the contractor is currently covered.
  5. Acquire a Performance Bond. This ensures that if the contractor cannot finish the project, the bonding company will. More important, it shows the contractor’s stability and success rate. If a company can provide a Performance Bond with a reasonable or low rate, the more faith the bonding company has in the contractor’s ability to finish the project.
  6. Written Warranties- Contractors are liable for work up to ten years after completion of the job, so written warranties remain essential. We advise learning clear information about the provider, how the warranty works, and what exclusions and special conditions exist. There are also extended warranties to cover things like roofing and painting. We suggest labor and material warranties too, especially considering the potentially high cost of labor if work needs to be redone.

Last but not least, insurance! Here are some recommendations to better understand which policy options are best for you.

  1. The General Liability’s options: Occurrence or Claims Made Policies? The difference here is where the General Aggregate applies, which caps the value of the insurance coverage. We recommend Occurrence because the General Aggregate applies to each claim individually. Claims Made calculates your maximum by summing the total of all individual claims, leaving you vulnerable because one large claim can max out a policy.
  2. Umbrella Policy- Available as extra protection on top of the General Aggregate
  3. Additional Insureds – Here you can negotiate costs called “Additional Insureds” on the contractor’s policy

You made it! Congratulations, these are critical steps towards choosing the right contractor. Now it’s time to enjoy the project.

Don’t forget your Close-Out Package and Unconditional Release at the end of the job!