What is the best predictor of performance for a General Contractor?

Prediction is a tricky thing especially when it comes to General Contractors. And in most cases, the lowest price is not always the best price.  Below are suggestions that were recommended during a discussion amongst my colleagues in a professional Owner’s Rep LinkedIn discussion group.

Previous experience is certainly a good indicator. Look for a Construction Manager (CM)/General Contractor (GC) that has a history of repeat projects at several current and former clients.  Ask for the contractors’ EMR, Experience Modification Rating, a 3 year average of workers compensation claims. This is as fair a predictor of past safety performance as any other. The rating should be a 1.00 (average for the industry) or preferably, less than 1.00 ( above average).

Another predictor of performance is who the Contractor will have on site as part of their team.  Interview the person that will be your principle point of contact and the Superintendent for the job.  You want them to be proactive and know how to plan a job, identify risks and mitigation plans. Upper management is important too for when (not if) disputes arise – who is the superintendent reporting to, and who is the VP Construction and/or President.  What’s the change order record for 3 other projects similar in scope and complexity to yours.   Are they pro-active or reactive (looking for problems – to blame on others – or looking for solutions / a better way)?

Interview principle contacts associated with the GC and then request names of recent project owners they have worked with. Although there are always issue’s in any project, it is the response and approach to overcoming them in a team like atmosphere that will best indicate what kind of partner you will have during the construction process.

The contractor may submit resumes of very qualified “A team” personnel in response to your RFP, but they are usually only the executive level resumes used to win the work who rarely get dirty with the day-to-day work.  Interview the on-site superintendent who will be responsible for the schedule and safety. In addition, demand a subcontractor list and ask for references for the major subcontractors proposed by the general contractor (HVAC, Electrical, Plumbing, Sprinkler, and Drywall). Always review all GC’s and major sub’s with your architect to get the best advice regarding GC and major sub performance and ability to meet the intent of the bid documents. It is all about the team that is put together by the general contractor. Whether you require a bond or not, you should determine if the GC can provide a payment/performance bond…not a good guy letter, an actual bid bond at a minimum.  You  may want to research whether there are frequent liens against them that would indicate poor pay to subs/suppliers.  If they cannot bond a project it -may- be an indicator of questionable financials including lack of working capital or a size of projected not historically completed by the GC.

Get the locations of several of their ongoing projects and make site visits.  Talk to their on-site personnel, look at the project conditions and the organization of the ongoing work.  One quick visit to the trailer can tell you right away if this is the type company you want to do your project. On-site observations can can tell you a tremendous amount about the management skills of the contractor; if the superintendent is active, and on site or if the project manager is reviewing potential issues within the project.

The theme developing here is that the project team makes the most difference. It may boil down to who is on the team – the project Super, experience, knowledge and problem solving that makes the project successful.

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8 Comments on What is the best predictor of performance for a General Contractor?

  1. I have also found a quick way to assess the professionalism of an on-site superintendent is to ascertain the amount of time he/she spends in the site-trailer. A professional construction manager/on-site superintendent is constantly surveying production to determine the quality of workmanship, the utilization of approved materials and the adherence to OSHA regulations. I always want and expect to “hunt down” the on-site supervision.

    S A Everly

  2. In general, I agree with most of your suggestions, however, your question: “What’s the change order record for 3 other projects similar in scope and complexity to yours.” is far more likely to be an indicator of the quality and completeness of the Contract Documents rather than a metric to judge the performance of the General Contractor.

  3. Robert A. Hacker // October 19, 2012 at 12:42 pm // Reply

    Thank you for a very informative article. Another predictor is the history and relationship the contractor has with the major subs. If he is using a number of first timers, find out why. If it is due to price, there may be something missing that will cause problems in the future. Make sure the Scope of Work is clearly defined and understood between the contractor, owner, and architect.

  4. Carter M. Young // October 19, 2012 at 12:08 pm // Reply

    Thanks Richard for sharing this information – it is very accurate. It is the first article I have seen on this website in months that was worth reading.

  5. Keith Andoos // October 18, 2012 at 9:02 am // Reply

    The best predictor of GC performance starts when (and if) they return calls! Mine NEVER have. Too many of them rely on their wives to act as secredtaries and don’t treat their jobs like a business…

  6. The best overall predictor is reviewing other project sites of the potential GC. The condition of construction site is the best indicator of the quality of the finished project..

    • Yes, a clean job site is also noticed by other trades, who can be advocates that generate leads for new business. An outside IT Consultant for one of our clients was pulling cable and took notice of how clean the landlord’s GC kept the job site and how professional the trades were. He recommended the contractor for another client of his.

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