How to get the right contractor

Getting the right contractor for the job is the first step towards the successful completion of a construction project. So it is important to carefully consider the bids by the different contractors to get the most competitive. Yet, many developers do not know what to look out for in the bids they receive.
Even though competitive bidding might take time, Mr John Wainaina, a construction manager with Pleng Ltd says, that the benefits of engaging contractors in competitive bidding far outweighs the drawbacks.

“It provides an opportunity to go through a variety of bids and choose the best. It brings the aspect of diversity since one is bound to receive bids from companies of different origins. Also, with competitive bidding, the developer can get quality work done at the best price. This is because the bids give the developer an opportunity to evaluate the materials to be used by the different companies and the cost implication,” says Mr Wainaina.
He said the five factors that should guide an individual in choosing the best bid are:

Cost
With price, the rule of the thumb is to give priority to the lowest bidder. However, that should not be the only consideration in deciding whom to give the job.
“You should do an in-depth analysis and check the rates given for the materials and labour against the prevailing market rates,” says Mr Wainaina.
“Maybe the contractor is offering lower quality cement, but on the flip side, he or she might be a partner in a cement manufacturing company and is thus able to get cement at a discounted price.
Ideally, you should contact the bidder to get a plausible explanation about the low unit rate. If he or she cannot explain it, consider another bidder,” says Mr Wainaina.

Litigation
Mr Wainaina says it is also necessary for the developer find out the contractors’ legal history. Has the contractor been involved in a lawsuit before? If yes, is the case over or continuing? Which legal issues dogs the contractor and what are his/her or preferred dispute resolution methods? These are the questions one should ask, Mr Wainaina says.
If given the job, Mr Wainaina says, the contractor should complete the task within the specified time, which is enforceable under contractual obligations. Failure to deliver in the specified time could create a dispute between the contractor and the client.
If this happens, the contractor’s and the client’s lawyers should meet and solve the dispute through arbitration or mitigation (court process); the contractor’s lawyer will be seeking extension of time or addition of money.

“Avoid contractors who always asked for extension of time in their previous projects as this might mean they are lazy,” says Mr Wainaina, adding that the bid should stipulate dispute resolution mechanisms.

Plant and equipment
“When making a bid, the contractor should provide the documents for all the plants and equipment his or her company owns, or has leased,” says Mr Wainaina. For example, if a contractor has a 1996 model of a piece of equipment and the project is to take five years, while another contractor has a 2002 model of the same equipment, go for the latter. This is because the older equipment is more prone to wear and tear, which could raise the construction cost due to high maintenance costs.

Though contractors sometimes lease plants and equipment because it is cheaper than buying their own, Mr Wainaina says most clients tend to shy off from contractors who indicate that they have leased almost every plant and piece of equipment in their bid.

“It insinuates the contractor’s lack of capacity to undertake the project and thus tends to scare the client away. However, the client should check the company’s profile to see previous projects that the contractor has undertaken,”Mr Wainaina says.

The financial statement
The contractor should also show the client their financial statement and tax compliance certificate.
“The statement of account demonstrates the company’s ability to carry out a project worth a certain amount of money,” Mr Wainaina concludes.

Company profile

The company profile shows the contractor’s experience since it indicatesthe projects he or she has undertaken, as well as those in progress. Mr Wainaina adds that it also says something about the contractor’s capacity to undertake your project.
“If you invite tenders for a property construction project and you have two tenders, where one contractor has done 10 road construction projects and five property construction projects while the other has successfully completed 10 property construction projects and five road construction projects, opt for the contractor who has undertaken more property construction projects,” he advises.