How do I choose a contractor for a commercial project?

How do I choose a contractor for a commercial project?

Compare three things and ignore the rest: whether they have built your specific building type, whether the quote covers the same scope as the others, and whether the person who visits your site is the person who will run the job. Most owners compare price first and discover the other three later.

A contractor who builds restaurants and a contractor who builds medical suites are not interchangeable, even though both are commercial interiors. Grease interceptors and hood systems have nothing to do with lead-lined walls and medical gas.

How many bids should I get?

Three is the useful number. Two gives you no way to spot an outlier; five means you are managing a bid process instead of a project, and good contractors deprioritize jobs they think they have a 20% chance of winning.

They must bid the same documents. Three quotes against three different assumptions tells you nothing except which contractor assumed the least.

What does a suspiciously low bid usually mean?

One of four things, and none of them is a bargain:

• Scope was excluded. Read what is not in the quote. Ceiling grid, fire protection modifications and final cleaning are commonly left out.
• Allowances are set artificially low. A $12 per square yard carpet allowance means you pick from a range you will not want, then pay the difference.
• Contingency is thin or absent. The money reappears as change orders.
• They need the work. A contractor bidding below cost to keep crews busy is a real risk to your schedule if their cash flow tightens.

Where one number is 25% under the other two, the question is not why it is low. It is what is missing.

What should I ask for references?

Ask for a project finished 18 months to two years ago, not last month. Recent clients are still being taken care of. Older ones can tell you whether the punch list got closed, whether warranty calls were answered, and whether the final number resembled the contract.

Three questions worth asking that reference: What did the project end up costing against the original contract? How many change orders, and were they the contractor's doing or yours? Would you use them again without bidding it out?

Does a local contractor actually matter?

For commercial interiors in the Capital Region, yes — for two practical reasons. Building departments differ by municipality, and a contractor who has pulled permits in Albany, Colonie and Clifton Park knows each queue and each inspector's expectations. That knowledge shortens schedules in ways that do not show up on a bid sheet.

The second reason is subcontractor relationships. A GC who has used the same mechanical and electrical subs for years gets returned calls, priority scheduling, and warranty work handled without a fight. A contractor assembling a trade list from scratch for your job does not.

What contract terms protect the owner?

• A defined substantial completion date with what happens if it is missed
• A written change order process requiring owner signature before work proceeds
• Lien waivers from the GC and every sub with each payment application
• Retainage, commonly 5% to 10%, released at completion and punch list closeout
• A warranty period, typically one year on workmanship, with manufacturer warranties assigned to you

Lien waivers are the one owners skip. If the GC is paid and does not pay a subcontractor, that sub can file against the property. Collecting waivers with every draw prevents it.

What to do next

Before you call anyone, write a one-page scope: what the space is, what it needs to become, your date, and your ceiling. Send the same page to every contractor. The quality of the quotes you receive tracks the quality of that page more closely than it tracks who you called.

Clifton Development Group is a Capital Region general contractor in Albany NY, working on commercial interiors, office renovations and full building projects across Troy, Schenectady, Saratoga Springs, Colonie, Clifton Park and Latham.

Further reading: https://cliftondevelopmentgroup.com/office-renovation-contractor-saratoga-springs-ny/