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Selecting a General Contractor

We have an architect and we have preliminary plans — now we need a contractor

Posted on Aug 7 2012 by Roger Normand

[Editor's note: Roger and Lynn Normand are building a Passivhaus in Maine. This is the third article in a series that will follow their project from planning through construction.]

What’s the best way to pick a residential general contractor (GC)? There are many books written on the subject. I want to focus this blog on one specific aspect: the point in time that the GC becomes a member of the team along with the architect and the homeowner.

Going out to bid is problematic

We pre-screened numerous GCs in face-to-face meetings, looked at some of their work, spoke with some of their customers, checked with Better Business Bureau, and considered their experience in building high performance buildings. We narrowed the field to two candidates, both of which had built a home to LEEDLeadership in Energy and Environmental Design. LEED for Homes is the residential green building program from the United States Green Building Council (USGBC). While this program is primarily designed for and applicable to new home projects, major gut rehabs can qualify. Platinum standards, and had experience using a blower-door testTest used to determine a home’s airtightness: a powerful fan is mounted in an exterior door opening and used to pressurize or depressurize the house. By measuring the force needed to maintain a certain pressure difference, a measure of the home’s airtightness can be determined. Operating the blower door also exaggerates air leakage and permits a weatherization contractor to find and seal those leakage areas. to check the tightness of the building envelopeExterior components of a house that provide protection from colder (and warmer) outdoor temperatures and precipitation; includes the house foundation, framed exterior walls, roof or ceiling, and insulation, and air sealing materials..

Traditionally, we would have our architect, Cris Briley, prepare a complete set of construction drawings (perhaps up to 40 large blueprints) and then send these drawings out for bid by several contractors. We believe there are many problems with this approach for both the GCs and the homeowner.

From the contractor’s perspective, there is a guaranteed business expense in devoting many hours of time and effort chasing product prices, figuring out how site conditions may affect the construction process, getting subcontractor estimates to accurately price out the entire project, and only a one (in-however-many-other-contractors are bidding on the project) chance of getting the job. Say there are three other bidders; that’s only a one-in-four chance of getting the work. That means the contractor has a 100% opportunity of spending time/money, with on average a 75% chance of NOT getting the job. The more time and effort the contractor puts into realistically pricing the project, the greater the contractor’s investment risk.

Homeowner risks

While we believe that most contractors are ethical, there are certainly opportunities for dubious bidding strategies. Does the contractor lowball the bid to get the contract and plan to make it up in “unexpected” change orders; or go down the quality scale on materials and labor, particularly for building systems not readily visible to the homeowner; or push the construction schedule at the expense of quality control?

There are risks for the homeowner also. Architects may not have the latest insight on product or labor price trends, especially for how much it might cost to actually assemble very unique designs. The owners and architect may have fallen in love with the house design, but the construction costs may be prohibitively expensive. Now what? Spend additional time and money for the architect to undo/redo the design to bring it in line with the budget; or worse, abandon the project? This is not a road we wanted to go down.

Start with a rough estimate

Instead, we asked the two pre-selected contractors to prepare realistic budget estimates within 15% margin of accuracy. We know that the building envelope is still fluid, and we have not yet begun the interior design. So we are looking for a rough estimate on affordability, not micrometer accuracy. More fundamentally, we want the selected contractor to use his/her experience and insight to explicitly participate, shape, and influence all of the final construction details. We hope the selected contractor can offer alternative approaches that reduce cost, expedite, or simplify construction without compromising building performance.

We will pay the non-selected GC a fixed, pre-determined fee for his efforts.

We expect to get the budget estimates from the two GCs in the next few weeks and then welcome one of them to the team.

The first article in this series was Kicking the Tires on a Passivhaus Project. Roger Normand's construction blog is called EdgewaterHaus.

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Aug 8, 2012 6:20 PM ET

Payment to non-selected GC a fee for rough estimate
by Tom Young

How was the fee for the non-selected GC determined? Negotiated with each individual or set by you in your request for the estimate? And, of course... how much?

Aug 8, 2012 8:40 PM ET

Response to Tom Young
by Roger Normand

After we laid out the conceptual drawings, and before they sharpened pencils, we offered and they accepted $750 to cover some of their time and costs.

Aug 9, 2012 11:50 PM ET

If you provide "conceptual"
by David Meiland

If you provide "conceptual" drawings and pay $750 for a rough estimate, do you consider that to be a commitment on the part of the GC to build your plan for the estimated cost?

As a GC, I would probably not need $750 to give you a rough estimate on a conceptual drawing--I would give you a range based on the square footage of the proposed design, using round numbers that I know are viable in our market. If you came to me with detailed plans to be built, it would take more than $750 to develop a detailed budget and contract.

I don't think your approach is a bad one, in fact it's remarkably considerate of the contractors involved. You now have a good sense of the cost of the house, and you've probably gotten to spend some quality time with each contractor.

Aug 10, 2012 1:37 PM ET

Reply to David on "conceptual"
by Roger Normand

Because we were building to the Passive House standard, which no local GC had any experience with, we wanted something more precise than a general square footage cost. We presented much more than a "conceptual drawing" for pricing. Architectural drawings were completed for the site plan, floor plan, foundation, wall cross sections, exterior elevations, window and door schedules, exterior elevations. We had also researched and set allowances for appliances, HVAC, cabinetry, electrical, fixtures, masonry exterior. All that would follow would be a few more detail X-sections, and interior finishes (nothing elaborate, and for which I might do some or all it). In short, it was a pretty well baked plan, but still on paper and thus very malleable to the GC influence we wanted.

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