So you’ve got the plans for your new building ready to go, you have started collecting bids from general contractors, and you are eager to break ground. After reviewing the bids, you notice that there is quite the range of prices from each of the general contractors. Some bids are on the low end, some are high, and some fall in the middle. If this is your first time hiring a general contractor you might think this is a no-brainer. Choose the cheapest guy, of course! Not so fast…
While hiring a cheap contractor may look appealing now, you should know that inexpensive can often equal inexperience. Hiring the cheapest, but least experienced, general contractor may save you money initially, but we can guarantee that it will become much more expensive during and after the construction process. This is true for a number of reasons:
Cheap, inexperienced contractors work less efficiently. A bid is just that: a bid. It’s not a set in stone final price. Often, inexperienced contractors are not the best at creating accurate bids. Their bid may seem low because they aren’t accurately judging the amount of time the project will take them. If they are inefficient and unable to stay on schedule, you will be the one paying the workers and subcontractors more. You also won’t be able to occupy the new building as quickly and if you are a restaurant, retailer, or other type of business, you can’t start making money until the building is complete.
They are less likely to be insured. This is a big no-no. A lot of new and cheap contractors are not insured when they definitely should be. This also creates a lower bid because you are not paying for their insurance. However, this is not something you should overlook because a lack of insurance can cost big bucks if something goes awry. A natural disaster, a job site injury, or any other disastrous human error has the potential to cost you, the building owner, more than anything else on this list. If something bad happens, you could be held liable for the damages even though the contractor is the one that’s uninsured. Make sure you hire someone that has general liability and worker’s compensation insurance. While you’re at it, make sure they are also licensed and bonded.
Change orders are more likely. A change order happens when you planned to do one thing on the construction project but then it is decided to do a different thing. A change order calls for an amendment to the contract. Change orders happen for a number of reasons: flaws in the design, unavailable materials, delays in construction, a change in price, etc. Very few construction projects will be completed with no change orders but it is important to minimize them because they can be expensive. Hiring an inexperienced, cheap general contractor might cause you to end up with more change orders than if you would have hired someone with experience.
You will have to pay to fix mistakes or you will have to take the contractor to court. The worse case scenario is when the cheap contractor actually makes big mistakes that will need to be fixed. In this case, you will have to find another contractor and pay them a lot of money to do the work. This could cost you almost twice as much as hiring an inexperienced contractor in the first place. If you want to take the cheap contractor to court and sue him for his faulty work, you will have to spend a lot of time and money. Lawyers aren’t cheap.
The building will be of lower quality. You will have to pay more down the road in repairs because of poor craftsmanship. Do you want to be performing roof repairs, for example, 5 years from now when it should have held up for 15? That will be quite the expense. Also, it’s likely that the lowest bidder is using cheap materials in order to win your business with a low bid. With a commercial building, especially those that get a lot of traffic, using high quality materials is vital to the longevity of the building.
Panhandle Steel Buildings in Amarillo, Texas has been in business since 1951. That’s over 60 years of providing high quality steel building and general contractor services to the Texas Panhandle. It doesn’t get more experienced than that. For a quote on your next project, please fill out this form.