In a previous post (HOW TO FIND A GOOD CONTRACTOR, August 15, 2015) I touched on questions you should ask your prospective contractor.  I expand on this topic in this post.

On a larger / commercial project, especially where the owner is accustomed to working with general contractors, construction firms may be invited to bid on a project based on their proven track record.  On much larger and more complex projects (especially government projects), construction firms may be prequalified in a more formal approach by having the firms interested in the project submit a prequalification form; then the construction firms deemed most qualified are invited to bid.

For smaller / residential projects where the owner is not accustomed to hiring and working with a general contractor, it it recommended you interview enough construction firms until you are able to narrow the field down to at least three bidders you feel you would be comfortable working with.  Here are a few of the key questions you should ask and what responses to listen for:

What Class licensed contractor and Specialization do they hold?  It is important the contractor holds the appropriate license in both classification and specialization to perform the work required by your project. In Virginia, The Board of Contractors issues licenses in one of three classes: A, B & C. Class A contractors can perform projects $120,000.00 and above.  Class B contractors can perform projects of $10,000.00 or more, but less than $120,000.00.  Class C contractors can perform projects over $1,000.00, but no more than $10,000.00.  The specialization for commercial building contractors is CBC and the specialization for residential building contractors is RBC.

How will payments be disbursed?  Your owner - contractor agreement for the construction work must describe how payments will be disbursed to the contractor.  There are two common methods for paying the general contractor.  The first method is based on benchmarks obtained throughout the progress of the work.  For example, the contractor would be paid at each of the following benchmarks: after the foundation has been installed, after the framing is completed, after the A-C, electrical & plumbing has been roughed-in, after the drywall is installed, after the floor floor finishes are installed and then upon final completion.  This method is most common for smaller projects with shorter construction timelines.  The second method is a monthly payment for the work completed during that month.  This method is most common for larger projects with longer construction timelines.  With either method the owner should hold 10% retainage against each payment which is paid to the general contractor upon final completion.  Retainage is held as an incentive for the general contractor to complete all work to an acceptable level.

How will the project be managed?  Your general contractor should mention things like: A construction schedule will be provided at the beginning of the project; a superintending will  be present at all times when subcontractors are onsite working; the project site will be maintained in a neat, orderly and safe fashion; if the project involves renovations, occupied portions of the structure will be sealed off to prevent the infiltration of dust; you will be notified of times when the electrical or water service will be shut-off and you will not be left overnight without electrical and water service.

Are you insured and bonded?  Different construction firms will have different insurance requirements.  At a minimum your contractor must have Contractor General Liability (CGL) insurance and may require workers compensation and automobile insurance.  Your general contractor must provide you with a Certificate of Insurance listing all their current insurance coverage, the  coverage amounts and the coverage period.  There are several types of bonds  (e.g. bid bond, performance bond and payment bond) which your project may require depending on the size and financing of your project.  At a minimum you want to make sure your contractor is bonded against property theft; this is especially important if you will have workers in your house around your personal belongings.  However, you always want to put valuables away in a safe / hidden place.

These are a few of the important questions you should review with your general contractor.  Your architect can assist you with this process and can be some of the best money you'll ever  spend.