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How do you currently choose your building contractor?
Perhaps you use a contractor that you know well from working on other projects. Or, do you take a recommendation from your client or a third party. Alternatively, do you go out to tender to contractors with whom you do not have a working relationship.
This equates to three selection options: Negotiated, Restricted or Open.
Before you look at these options, what are the risks in selecting a building contractor from the choices shown in Selecting a Building Contractor in London.
- A contractor with whom you have always worked
Do they match the client needs on your next project?
Is there someone else who might perform better?
The risk is that if you keep using the same contractor, does that stifle opportunities to create new working relationships that might improve your business.
- A contractor that is recommended to you
Can you trust the recommendation, as just because they have worked well with someone else it does not necessarily mean that they will work well on your project?
Has the contractor worked on a similar type of project?
So there is still an element of risk and you still need to follow your normal procurement process.
- Tender process
Is it too time consuming to prepare a detailed tender pack?
How do you choose the contractors to go on your list?
It does mean that you can make quick and clear comparisons between the submissions you receive but this process has its risks as you are meeting with the ‘unknown’. So have a clear process in place to make your selection.
What is the best option for you, your project, and your client?
- Open Option
You advertise a tender opportunity and any interested contractor can apply to be included in the tender process. The advantages are that you spread the net wide to get a good selection of prospective contractors. The downside is that you need to allow sufficient time for responses to be received which can add to the timeline of your selection process. But also, like with job applicants, you can spend a lot of time sifting through the applications and a high proportion of them may not be suitable for your specific project.
- Restricted Option
In order to save on the administrative workload, you may consider a restricted option where you invite a number of selected contractors to tender for the work. This allows you to reduce the time allocated to the tender process and it is possible to set a competitive deadline for the return of the tenders which enables you to see who is most keen to work with you on the project. Although this is less time consuming, you are reliant on having put in place a good pre-selection process to narrow down your choice of companies.
- Negotiated Option
This option enables you to select one or more potential contractors with whom you will negotiate the terms of the contract. Usually you would use this option when you already have some working knowledge of the company and they have passed the pre-selection checks, perhaps for a previous tender for another client.
You are likely to choose a different option for different projects and if you would like more details on an effective tender process and the selection of a building contractor, please download our guide Best Practice for Selecting a Building Contractor.