CREJ - Property Management Quarterly - April 2016
When seeking a construction company for a project of any size, in-depth research should be done and important factors should be considered before committing. Capacity. First, a property manager should look for capacity; it is helpful to know how busy a general contractor is before engaging in a partnership. Many general contractors, especially the larger ones, will have the ability to produce a capacity chart showing the amount of resources they currently have committed to projects during a specific time frame (fiscal quarter, yearly, etc.). A reputable general contractor will only commit to work if he knows he has the ability to provide adequate resources for the project. Personnel. Property managers will want to choose a company that has the correct personnel to put forward. It is important that a manager feels comfortable with the construction team working on the project. If a construction team is not clear on its specific tasks, or cannot work together as a unit, it is a warning sign for the future of the project. A general contractor’s employees are his most important resource, so it is important to make sure a project has the right people for the job and that there is a sense of unity among the team. Alignment. Managers should think about a general contractor’s overall project approach, culture, goals and matched expectations. Ultimately this engagement is a complex business relationship over a length of time, so seeing eye to eye is imperative. For example, if your company values and has an expectation of sustainability, then selecting a general contractor with a LEED accredited staff with experience in green building would be worth seeking out. Billing. A valuable point to note when negotiating with a general contractor is to fully understand at what point the commitment is made and when the billing begins. A general contractor may provide preconstruction services at different rates depending on the situation. However, if it is the only contractor on record, it may defer billing for preconstruction services until the start of construction. It is always best that property managers go through the negotiating process so that the construction company can assist to the best of its abilities. Planning. Lastly, a great tenant improvement project can be derailed before it even breaks ground with hasty or shallow construction efforts. Our success in this department comes from engaging with the owner, the designer and any other key team members at the earliest possible point, ensuring everyone is looking at the project from the same angle and feels comfortable exchanging ideas freely. It is important that managers hire a general contractor early on in the planning stages of a project; they are in the business of managing time and resources and can help set realistic expectations for project duration.