By Paul Riggle, AGS Construction
*2023 Titanium Sponsor*
If you were having repair work done in your home, would you ever invite a contractor in who you have not verified their credentials or gotten references from? There is no difference if you live in a HOA community or serve on an HOA Board. The final work product you get from a third-party contractor will impact everyone in the community and a bad decision could be detrimental and even more costly in the long-run. One way to maximize the likelihood for the success of your project is to follow some best practices in selecting a contractor. By using techniques listed below, everyone will be on the same page through the evaluation, bidding, and construction process.
- Document Your Selection Process: In order to help you organize your thoughts around selecting a contractor, consider developing a written plan that documents the process you are going to use. This is a great way to help your community understand the process and avoid headaches down the road when certain members of your community ask questions.
- Qualified Contractor Estimates: Having at least three qualified estimates will help you get the best value for the best price, but equally important will help you determine how you feel about a contractor and how they will get along working in your community. You can start by getting recommendations from people you trust. The last thing you want is your community to be unhappy and you fielding complaint after complaint.
- Estimate Evaluation: Whether you have experience in the estimation process or not, the most important thing in comparing estimates from different contractors is to make sure that what was estimated is what you specifically asked for and that you are able to compare them on an “apples to apples” basis. That means there are no items missing and nothing extra included…Think things like the same quantities, the same repair scope, the same quality, etc. One way to assist you in this process, especially for large jobs, is to use an engineer as a resource. The engineer can help with identifying qualified contractors, creating the scope of repair, providing a bidding template, evaluating the estimates, and helping you understand them. Using such a resource can help identify gaps in estimates that appear too low that could possibly cause the need for expensive change orders down the road or estimates that are too high and are either gold plated or just too expensive for the work required. Engineers can even provide oversight of the contractor to make sure the contractor performs the repairs according to design.
- Communication = Success: The single biggest factor to ensure success of your project is communication. Utilizing your given communication infrastructure is great, but on a large project, your communication strategy needs to be augmented. Does the contractor have established practices for communication? Do they use multiple methods to share information as people receive and ingest information in different ways. Types of communications you should look for include physical postings, cell phone numbers of on-site staff, 24-hour emergency numbers, online portal, document warehouse, strategies for neighboring communities, etc.
- Get History & References: Ask the contractor how long they have been in business and how has their business changed from a scope, management, or ownership perspective. Also ask them about their safety records. Any reputable contractor should be able to provide that and give you references, but you should not stop there. Ask for specific references for a scope of work that is similar to what you are planning. You should also consider visiting the job sites for these references and talking to community managers, HOA board members and homeowners who were present during the construction.
- Local & Licensed Contractors: If you have ever tried getting support from national companies, you know how challenging it can be. Hiring a local contractor will provide much easier access to people who can help if problems arise. Local contractors have a vested interest in making things right as their reputation is key to their future success. Additionally, they are more likely to be familiar with specific building codes in your area. You’ll also want to ask for their local physical address and phone number. Another key is to make sure the contractor has the proper licensing to not only work in your area, but to perform the work being asked. Not all licenses are the same, so ask for the details.
- Insurance & Bonding: Make sure to inquire to the contractor’s insurance…This includes General Liability Insurance, Workers Comp, Auto, Umbrella, Excess Liability and any local special insurance requirements such as property damage, pollution or recycling. The coverage should exceed the total value of your project. Also, make sure you request that the community, the Board, property managers and any other interested party are listed as additional insured on a Certificate of Insurance. Even if you do not want to consider a bond, asking the contractor what their bonding capability can give you some keen information in making your contractor selection.
- Product Advice: Every contractor will have products and systems they are most comfortable with. These likely have worked best for them and their workforce on past projects. You should listen to a contractor’s product recommendation but inquire about alternatives and why they prefer the recommended solution. If a contractor only offers one product solution, they may be getting special discounts that they may not necessarily pass on to you.
- Payment Options: You should discuss your budget and payment options with a contractor. There is no industry standard to payment options and many contractors have multiple possibilities that if you don’t ask about, may not be offered. Things to consider include special financing, early payment discounts, down payment or commencement payments, retainage, etc. Regardless of what payment option is arranged, do not pay cash. Pay by check, credit card or ACH and do so on time. Part of a good team is for all parties to do their part.
- Documentation: Ask the contractor what their documentation strategy is. This should include third party documents from engineers, city permits, daily logs, etc. All this information should be readily available to you, ideally at any time, but at minimum at your specific request.
The choice you make is an important one and will ultimately determine the success of the project and how much you will have to do throughout this undertaking. It is important to not be pressured into making a quick decision. When you have chosen a contractor, get everything in writing and make sure you read all the fine print on any estimate or contract. The contract should include a detailed description of the work, a payment schedule, an estimated start and completion date, guarantees and warranties and signatures from both parties. The small details can make or break a project when any issues or differences of opinion arise.
At the end of the day, it’s your choice and a decision you must live with. Take your time and do it right!
Paul Riggle is the Vice President of Sales and Marketing for AGS Construction and works with HOAs, multifamily, residential and commercial properties for their communitywide restoration and reconstruction projects. Paul works hard to strengthen relationships between the Sales Team, Project Managers, Community/Property Managers, management companies, Board of Directors, residents, and vendors. The ultimate goal is to deliver a successful project to the customer on time, within budget and safely while exceeding expectations. "AGS wants to be your preferred contractor!"
