Questions

How do I choose a contractor for my project?
When choosing a contractor, it is important to choose a contractor that has both the experience and resources necessary to complete your project in a timely and efficient manner. The best way to assure yourself that a construction company can complete your project successfully is to take a look at what they’ve done in the past. Most contractors would be happy to show you a portfolio of their work, and will provide references upon request. Try to find a well-established contractor that has a good track record on projects similar in scope to yours.

What is the difference between competitive bidding and negotiated contracts?
Contractors are generally chosen in one of two ways; the first is to select a contractor based on the results of a competitive bidding process, the second is to choose the contractor first, and then negotiate the price. Competitive bidding is effective only when the scope and nature of the work are well defined. It’s only possible to compare prices when you’re certain that everyone is quoting the same work at the same level of quality. The biggest obstacle to competitive bidding on a construction project is that projects are often not well-defined, and quality levels can be difficult to verify. Many contractors will even decline to enter into a competitive bidding process, in part because it’s entirely possible to do an accurate estimate, only to lose the job to another bidder who may have neglected to include key elements of the work. Some contractors will even bid low intentionally, knowing that they will be able to recover the money through change orders as the project progresses. For these reasons and others, many builders prefer to work only on negotiated contracts.

Are there different types of contracts for construction?
Once you’ve chosen a contractor, you still have a choice as to how to structure the contract. Most residential construction contracts are either based on a lump-sum (aka. fixed price), or a cost-plus (aka. time and materials) basis. With a lump-sum arrangement, the contractor agrees to do a defined body of work for a pre-determined price. Any modifications that you may decide to make during the course of the project are generally handled by written change order, and may represent additional charges. When you have a cost-plus contract, you are usually billed for the actual costs of all labor and materials that are needed to complete the project, plus an agreed-upon contractor’s fee for profit and overhead.

Isn’t it always better to get a fixed-price contract?
A fixed-price contract can work well if the project is very well-developed, and you don’t expect many changes. Fixed-price contracts are always heavily dependent on the contract documents in the form of blueprints and specifications. If projects are not fully developed, fixed-price contracts can actually be more expensive than their cost-plus alternatives. This happens because contractors will always plan for the worst-case scenario. With a fixed-price contract you may end up paying for work that would have been necessary if everything had gone wrong, whereas under a cost-plus arrangement, you pay only for work that was actually done. When working on a fixed-price basis, the contractor assumes a large part of the downside risk, but also reaps the benefit of any savings that might be realized if all goes well.

How much does it cost to build? Isn’t there a standard cost per square foot?
Construction costs can vary considerably, and it’s often very misleading to try to use a standard cost per foot to try to estimate the total cost of a project. The only way to get an accurate cost estimate is to have a bid prepared from a completed set of plans, including both architectural and structural drawings, as well as all materials specifications.

How long will my project take, and can I stay in the house during construction?
Project durations vary depending on the scope of the work being done. Most contractors will be happy to provide you with a proposed schedule along with any estimate that they might be preparing. As for living in your house while under construction, keep in mind that construction activities can be extremely disruptive, and it may only be practical to remain in the house if the project is of very limited scope. If you are to remain in the house, be sure to go over the schedule very carefully, especially as it relates to systems and utilities outages, roof removal, trenching and paving demolition, etc. The fewer surprises you have during the course of your remodel, the happier you’ll be…