Originally published on SmartInsight, a product of JBKnowledge
The decision as to what construction company to hire can be a difficult one. Hours of research and strategic planning accompany this sometimes tedious search for a reputable organization. To help alleviate the frustration synonymous with the search for a reputable contractor, we have compiled a list of the seven questions you should ask before partnering with a subcontractor, general contractor, supplier or owner on a construction project.
1. How long has this company been in business?
Most contractors prefer to work alongside other contractors who have been in business for many years. Many years of business typically brings with it tenure and experience that may be unmatched by newer companies. However, simply assuming that because a construction company is older that it will perform better may not always be the case.
2. Has this company gone by different names in the past?
If a construction company has changed their name at any time in the past, this should raise questions concerning the company’s motivations. If a name change, or multiple name changes have occurred, that could serve as an indicator that the company may be trying to hide things from their past. Name changes are not always a red flag, though. Mergers and other strategic business choices could have facilitated the name change. Do your research and be prepared to interpret the construction company’s response to this question.
3. Does this company have a permanent address?
A construction company without a permanent address should serve as a red flag. A permanent address is essential to ensuring the company is actually a legitimate firm that can be reached should problems arise. If the contractor has a permanent address you can even use Google Earth to scope out their office without having to physically visit their facility, which can further solidify their legitimacy. A permanent address and areas of work can also be verified from previous project history.
4. Is this company licensed and registered?
Agreeing to work with an unlicensed or unregistered contractor puts your company at risk. Lawsuits and state law violations may result from working with an unlicensed or unregistered construction contractor. Licensed and registered construction companies instead offer many benefits, including their enrollment in continuing education courses, that will bring assurance of quality performance to your company. Check to see if the organization belongs to any association that shows their commitment to their trade code. Reference any certifications, accreditation, and awards potential project partners may have incurred over the years to further aid in your analysis.
5. Does this company have valid references?
You wouldn’t hire a new employee without calling their previous employers. Soliciting references from others who have previously worked with a specific construction company could give you even further insight into the quality and levels of service of that company’s work. Calls should be placed to the references, and if possible, site visits scheduled to inspect the quality of the potential partner’s work. Identifying and coordinating with all previous parties involved with that company will help ensure successful outcomes on the project.
6. Does this company have a safety program?
Safety is a paramount concern for everyone in the construction industry. Choosing to work with a partner that maintains high safety expectations, programs, and practices creates a place where you and your employees can be productive and feel confident. Any worker injured on a job site can cause costly project delays. Knowing your potential partner has effective safety techniques in place will provide more assurance.
7. How “healthy” is this construction company?
Accepting a bid from a contractor solely on the basis of a personal relationship or extremely low price can lead your company to turmoil. All the construction companies that you are choosing from should instead be evaluated on their so-called company “health.” Indicators of a “healthy” construction company include their ability to commit financially to the construction project, their ability to communicate effectively in a timely manner, and the results and quality of their historical safety records. Requesting financial health and credit reports on potential partnerships will help identify and mitigate any risks of default, operational, and safety risks.
The good news? All the questions mentioned above can be answered on SmartInsight!
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