Should you get competitive bids for your project?

By Lorianna Kastrop, Vice President, The Kastrop Group, Inc. Architects

We’ve seen an interesting phenomenon occurring lately, less building owners are obtaining competitive bids for construction of their homes or buildings.  We had one client whose project was significantly delayed because they wanted written estimates from three different architects, then again delayed because they wanted three different contractors to bid on the job.  They tried contacting one General Contractor (GC) after another, and waited months for the bids to come in.  One of the contractors that they really wanted (and that we recommended) did not even bid on the project.

It is sometimes difficult to get three or more GCs to provide competitive bids.  Here in the Bay Area we are finding that some GCs are refusing to bid on smaller projects, or they won’t bid if they know that they are competing for the job.  Highly-rated contractors are in demand, and preparing a thorough construction bid is a time-consuming (and often uncompensated) process.  If the GC has a lot of projects in their pipeline already, they may not need to do this traditional marketing work.

From the client’s perspective, waiting for the bids to come in and then getting on the schedule of your preferred contractor may cause you to miss the best possible timing for your construction (such as a weather window, or a deadline for getting it built and sold/leased/open for business).

If you are in this situation, we recommend that you select your GC early, before the design process is complete.  You can get referrals from your architect about GCs that they have had success with on previous projects.  You can narrow down the field by checking online reviews and websites, such as the Better Business Bureau and Angie’s List, etc.  Confirm that the GCs you consider are licensed and insured in your state.

Then start doing some research by phone.  You can call the GC and check on their availability.  If he/she is very busy, ask when they may become available and see if that fits your project schedule.  Ask if the GC has done work in your area and get the name/address/phone of a few references (previous clients).  Be sure to call those references—don’t just rely on a website post. Ask for an in-person meeting with the GCs that seem to be a good fit.  Get a feel for their personality and communication style.  By doing all of these things, you may be able to select a reliable GC even without a competitive bidding process.

When the construction drawings are complete and the GC that you have chosen provides a construction bid, you still have a chance to check with your architect and other professionals in the construction industry to see if that seems to be a reasonable price based on their experience.  If any warning bells go off, then you may need to go back to your GC list to obtain another bid.

If a GC has been selected early in the process, we are always happy to discuss the design with them.  This ensures that the project team works together and facilitates the preliminary construction estimates that keep the project on budget.  That’s the positive side of not doing competitive bidding.  The bottom line is:  getting competitive bids is still a prudent approach to construction, given the high costs involved, but don’t be dismayed if you cannot obtain the traditional three competitive bids.

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