Must do’s in hiring and managing a contractor

As the client, you are the one driving the process. Before speaking with contractors, spend time thinking about your goals for the project — what it might look like, the amenities you want, and so on. If you don’t know how to translate your goals into specific features or products, hire a design consultant or a design-build firm that can offer that service.
Here are a few tips to assist you with the process:
  1.  Get help from a Quantity Surveyor or other suitably qualified person to come up with a schedule of tender costs required to allow the Contractor to break down his estimate by building elements (at least) – NEVER accept a lump sum price.
  2. Secure at least three quotes. This would usually require you to send out at least five inquiries as 100% responses aren’t often achieved.
  3. As far as possible, to best manage costs, you should procure materials yourself rather than leave it to the Contractor who will add a markup to the costs of materials acquired by him/her. It is worth the cost to pay a Quantity Surveyor to provide a materials listing to guide you as to quantities required.
  4. Make sure your drawings have been prepared in sufficient detail to facilitate a comprehensive quote.
  5. Have a Construction Contract Document prepared and signed.  Seek legal advice from an attorney versed in similar contracts or seek assistance from a Quantity Surveyor or similarly qualified professional.
  6. Ensure payment terms are understood and agreed.  Mobilisation payments should not exceed 10% and are recovered in the first 4 to 5 interim payments. Interim payments based on progress to date are normally agreed and paid on a monthly basis. A retention of 10% on interim payments is usually withheld until practical Completion,  at which point half of the retention is paid.  The remainder of the retention monies is paid after the defects liabilities period (usually one year) has expired. As far as possible, avoid situations where payments to date exceed the value of work carried out at any point in time. Try to always be in a position where you are owing the Contractor rather than vice versa.
  7. Request a program of works from the Contractor’s at the time estimates are submitted and agree key milestones with the selected Contractor prior to the commencement of work. This programme and the agreed milestones need to form part of the Contract Documents. Negotiate Ascertained Damages to be paid by the Contractor for time overruns. Time is money and overruns generally result in added costs to the Client in the forms of bank charges, additional rents to be paid, etc.
  8. Keep a note of the Contractor’s manpower on a daily basis.  Significant drops in the quantum indicate an issue which can lead to a slow down in progress.
  9. Do NOT leave quality control up to the Contractor. Either hire someone versed in building construction or you, yourself must be regularly present to verify that the project is being constructed in accordance with the drawings and specifications. If you are unable to verify quality it is worth the investment to pay someone to do so on your behalf. Maintenance costs down the road will be a function of the degree of quality control exercised during construction.
  10. Even if it’s only on a per visit basis,  hire an Engineer experienced in building construction to carry out inspections at key points during the construction and BEFORE any concrete is poured.
  11. Take lots of photos regularly, daily if possible. Taken thoughtfully, these are excellent historical records and memory joggers.

Written by 

Lori is an accomplished construction manager and engineer, who has wide experience in the commercial and residential construction industry.