When selecting renovation contractors, many building owners’ decisions are based solely on the bottomline. In short, the lowest price bidder wins.
Other owners, however, carefully consider the intricacies of the project’s scope. What they appreciate that others don’t are the many value-added, non-financial advantages that a talented contractor brings to the project. These "performance measures" may be the key for the successful completion of a renovation, although on the surface it can be difficult to put a price tag on them. Key examples of contractor performance measures include:
1. Business disruption avoidance
Business disruption avoidance refers to the contractor’s ability to identify and categorize possible risks early on that can throw the project off schedule, resulting in cost overruns and customer dissatisfaction. The contractor should be able to draw up a detailed Risk Management Plan where a list of potential risks are identified. Each individual risk should be assigned a percentage of likelihood of happening, such as high, medium or low risk. At that point, the contractor needs to take any potential high-risk item and create a “what if” scenario including a workaround plan. One of the contractor’s employees should monitor this Risk Management Plan daily with specific guidelines as to where and when to alert the project team, including the building owner, should that particular risk occur. A successful Risk Management Plan greatly minimizes costly overruns and change orders.
2. Qualified suppliers and subcontractors
The success of a project greatly relies upon the general contractor’s vetting of suppliers and subcontractors. It’s the contractor’s responsibility to ensure that suppliers and subcontractors alike have the same sense of value and dedication to the completion of a project as the contractor in charge. Professionalism, safety, good skill sets, and open communication, access to the right materials and supplies, as well as respect for the owner, are all very important attributes when selections are made.
Another key area of pre-qualification scrutiny is a subcontractor's financial data. General contractors may ask for particular details like annual contract volume, sales and net worth, or may request full financial statements. Another essential pre-qualification item is safety management. General contractors should require that a sub's workers compensation experience modifier be 1.0 or lower, confirming that its loss experience has been on par with others in the industry. General contractors also may ask for Occupational Safety & Health Administration (OSHA) data such as illness/injury rates and lost workdays, along with information about a sub's own safety management programs and procedures.
Work history, of course, is important, such as the type of work done, jobs completed or in progress, and disputes over previous work. In addition, general contractors should look at a subcontractor's schedule of upcoming jobs to be sure it is not overextended.
3. Long-term subcontractor relationships
Subcontractors are valued partners to the general contractor. The general contractor’s ability to maintain long-term relationships with their subcontractors provides a value-added proposition to a project because it builds efficiencies, increases quality, as well as upholds a high level of trust. Also, a general contractor maintaining a deep bench of subcontractors helps to keep the bid process open and transparent, and makes overall pricing more competitive.
4. Jobsite cleanliness
There is no getting around it – renovations are messy. Having a contractor team that’s skilled in their craft, as well as organized, clean and professional will help ensure an overall positive renovation experience. A clean jobsite is an efficient jobsite. A site in good order and clear of debris encourages workers to complete tasks faster with improved quality. Finally, a clean jobsite is a safer jobsite. The most cited OSHA safety infraction is called ‘housekeeping.” It's very common because people who tend to leave a mess have a higher chance of tripping or slipping. Messy jobsites clearly cause accidents, especially with jobs that start early in the morning when it's still dark out or go well into the night.
5. Controlling noise levels
As part of the management process the general contractor must be aware of peak times of operation, especially in high traffic businesses, such as retail outlets, food chains, and hotels. Awareness will help the contractor modify the work schedule so that noisy tasks are performed during off-peak hours or during slow periods of the year to prevent customers and employees from being disrupted. Controlling noise and maintaining cleanliness creates an environment where the business can maintain cash flow throughout the renovation project.
6. Complaints by customers
In the world of 24/7 social media, businesses can no longer afford to have bad reviews go unanswered. Many hotels, for example, now have paid staff whose job it is to answer reviews whether positive or negative. Your renovation contractor should be mindful of social media backlash brought on by excessive noise, messes, or rude behavior to guests. This will ensure that any posted negative feedback is kept at a minimum, if at all.
7. Controlling deliveries
Given today's supply chain struggles, an important responsibility for a general contractor is the ordering, approving, controlling and handling of materials received on-site. In a hotel, for example, how will the new carpeting, wall coverings, and FF&E be delivered so additional costs are not incurred? Who is the contractor’s “storekeeper” responsible for controlling on-site materials? How are materials registered? What forms are used to record the arrival and distribution of materials? Where will materials be safely stored? A skilled general contractor will have all the answers for the building owner.
8. Open communications
Open communications between stakeholders is a key to successful renovations. This runs through the initial stage of scope planning, to budgeting, the bidding process, performing the work, all the way through to completion of the project and long after it is done. Elements of open communications include a daily report identifying manpower levels, deliveries, safety, and current areas out of service. Weekly phone calls should also take place to discuss the overall schedule, design and client operations so that all parties can work to manage issues as a team. For instance, often a renovation will require temporary “laydown” areas to store supplies. Specific dates and times for that space to be available must be negotiated between the renovation contractor and the owner/property manager prior to project start. Once the renovation is underway, it can be determined during the daily meetings if there will be delays in delivery of the space or the materials, as well as if customers will be dissatisfied that the space is closed.
9. Punch process
A complete, detailed punch list is the sign of an experienced contractor. Identifying the punch process procedure at the front end of the renovation sets the bar for expectations of quality. Signing off on punched areas is basically saying everyone has reviewed the work and agreed the space is ready to re-open, sell or occupy. When properly prepared, it should identify which team members will be included in final punch-out, while permitting any recovery time needed to make a last minute repair or alteration in the schedule. In many renovations the punch-out is an anxious time and often the anxiety is due to not having expectations clearly set upfront.
Final thoughts
The selected contractor should work diligently to understand project goals and provide the necessary tools to help ensure a successful project with a high return on investment. These Performance Measurements can serve as an excellent gauge as to the contractor’s professionalism. Behind the scenes, Performance Measurements are all too often unnoticed yet are necessary for a positive renovation experience.