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Take Caution When Hiring the Low Bidder

 

What Can Happen When You Pick the Low Bid?

Part Two about the Professional Contractor

From a family friend to a pick-up truck contractor out of the phone book, there’s always someone willing to provide construction service unbelievably cheap.  Likely, a business owner can’t believe their good fortune when finding someone so inexpensive, that is until he or she hears a story like this…

A business owner envisioned building a new office using his own custom design, so he contacted an architect to draw the floorplans and then put out a call for bids.  He accepted the lowest bidder and after a few months was left with a shell of a building with some drywall, an unpaid electrician, and a missing contractor with a majority of the budget depleted.  

So where did the owner go wrong?  He didn’t have a relationship with the contractor and then didn’t prequalify him before accepting his low offer.  It turns out that an interview with the electrician could have raised many flags because he had trouble previously with the contractor on another project and wouldn’t even work with him unless he could get a line of credit covered by the bank.

To protect yourself on your next building project, take the extra steps to investigate or qualify before signing anything or giving a handshake.  Below is a list of suggested inquiries to ask a contractor:

  • Ask for references (customers, bank, subcontractors and suppliers) and call them
  • Ask how long they’ve been in business
  • Ask for copies of their license, insurance and bonding capacity, if they don’t have any records, move on to another contractor
  • Inquire about their safety record and have them provide MIOSHA logs
  • Search for the company or owner on the web for any reports of violations and/or news articles
  • Look into materials being proposed for longevity and durability
  • Ask if they have a warranty period

I’m not saying that the least expensive bidder is always unqualified because often enough we are the lowest bidder, but a building owner always has to investigate to make sure the lowest bidder is a sound investment to achieving his or her dream building for the duration that it’s needed.

Remember, not every project that has a snag is a failure; it depends on the customer service provided to see that a problem will be taken care of.