Choosing a general contractor to oversee a building or expansion project may be the most crucial decision you make once you’ve checked your company’s coffers, retained an architect and developed a loose timeline of when you’d like to open shop in your new digs.
“The role of a general contractor is like that of a quarterback,” explains Chip Marous, president of Marous Brothers Construction in Willoughby. “He runs the project from start to finish and handles everything and everybody involved.”
That includes working with architects, hiring subcontractors and, more important, coordinating details with the business owner who is footing the bill, says Paul Globokar, chief estimator and project manager for Rocky River-based Ohio Diversified Services.
“They’re responsible for bringing a project in on time, on budget and to the exact specifications of the owner and architect,” he says.
Hiring a general contractor early in the project’s process, before it’s time to break ground, can lower a project’s final cost, says Globokar.
“A general contractor can foresee problems, such as soil condition problems, utilities issues and structural considerations that a business owner who has never built a building or overseen an expansion project would even consider,” Globokar says.
But picking the right general contractor can be a chore, explains Robert Fortney, owner of Fortney & Weygandt in North Olmsted.
“When an owner wants to do his taxes, he doesn’t go to the phone book to see what accountant he’s going to choose,” Fortney says. “When he has a legal problem, he doesn’t look for a lawyer then. And, when there’s a construction project, an owner doesn’t want to go out and find a contractor.
“The most important thing a business owner can do is to establish a relationship with a proven construction professional. That enables him or her to continue to do what they’re doing — run their business — and leave the project to someone who’s professional and can get the job done.”
There are two main ways to do that — choose someone you know or put the project out to bid.
In the bid process, specifications for the project are issued and construction firms submit bids. Bids include every detail a contractor will handle and the price for doing so. Typically, contractors work on a 12 to 15 percent profit margin and large firms usually have 30 to 40 projects going on at any one time.
Since it is such an active and competitive industry, the bid process is designed to level the playing field by giving everyone the same information to work with. In theory, says Marous, bids provide a competitive landscape in which the lowest price emerges.
In reality, it doesn’t quite work that way.
“If the owner is not a construction professional and he relies on the bid process, he’s leaving himself wide open to get burned,” says Fortney, whose company reached $100 million in revenue last year. “If you went to a mechanic and he said, ‘Sure, I’ll fix your brakes for $29.99,’ you’ve got no idea what he’s doing for that price. One thing’s for sure, you know it can’t possibly be a top-notch job.”
That doesn’t mean you should eschew the bid process completely. It simply means you should employ a touch of caution and look beyond the lowest bid price submitted. Globokar suggests bringing in the lowest three bidders to gather more information.
“All things being equal, price is usually the determining factor,” he says. “But often, that’s not the case. It goes well beyond cost.
“Every owner has a right to be comfortable with the person he hands $5 million to.”
Dustin Klein ([email protected]) is editor of SBN.
