When to Engage a Contractor on A Project

Everyone begins a construction project from a different place, with varying team members being engaged at all different points in the process. While every project is unique, there are definite advantages to having a contractor lined up early in the process. While people commonly hear that getting several bids on a completed set of construction documents is the 'best way', speaking from experience, the projects that we see succeed time and time again are the ones where the client either comes to us with a contractor already on-board, or engages a contractor before design sign-off. This goes for both residential and commercial projects, and we are defining success as a project that is (1) built and (2) professional and personal relationships are stronger after the project, not strained or dissolved.

We've listed out the common time frames for engaging an contractor below with a few notable pros and cons from our perspective:

1. Engage a Contractor Before Design Begins

   • Pros:

     • Everyone on the project knows the goals, budget and priorities from day 1 and have time to build a working relationship and work out communication kinks

     • The contractor can weigh in on proposed building size as relates to construction costs they are seeing day to day before design even begins, so we start with an appropriate overall square footage

     • The contractor can build a budget / fee with the clients in real time based on real numbers and real design features

     • The architect and contractor can discuss trade-offs with the client when it comes to material choices, HVAC system preferences, etc. rather than making assumptions that may turn into changes later on

   • Cons:

     • You are introducing another opinion into the design conversation. Discussing cost early is important, but a lot of clients want to see their vision come to life first before entertaining opinions that perhaps don't share the same enthusiasm or are focused on nitty gritty details at a conceptual stage of design.

     • Locking in a contractor this early likely means you are in a negotiated fee agreement (typically cost + a % mark-up), which may or may not be the cheapest path - but many would consider this a worthwhile trade-off for the cost control you have engaging a contractor this e

       
       

2. Engage a Contractor Just before Design Sign Off

   • Pros:

     • You have your design relatively settled based on your goals and priorities without getting too many opinions that might distract you and the architect from the initial vision.

     • The contractor has some concept drawings to look at and discuss with you, and they may use the initial draft to provide a preliminary estimate or guidance on big ticket construction cost items that may not align with the budget you've discussed with them

     • If the contractor flags items that are not in-line with the budget, we can revise elements of the design before moving into construction documents

     • You can reach out to several contractors to gauge interest in helping you construct the project and bidding the project in general

     • Discussing budget goals and design goals from this point forward still allows a fair amount of time to build a relationship with your contractor so you know you are on the same page before major financial agreements are signed

   • Cons:

     • We are likely basing our square footage on a ballpark per-square-foot cost equation that may or may not be perfectly in-line with construction realities of the moment.

     • Major changes to the design at this point may still require an Additional Service Request (ASR) as contracts typically stipulate a maximum number of design iterations included in the base fee.

     • Locking in a contractor this early likely means you are in a negotiated fee agreement (typically cost + a % mark-up), which may or may not be the cheapest path - but many would consider this a worthwhile trade-off for the cost control you have engaging a contractor this early.

       
       

3. Engage a Contractor After Design Sign Off

   • Pros:

     • The contractor can put together a ballpark estimate based on the concept plans so you are better able to plan your spending and budget

     • You can have a couple of contractors put together ballpark estimates and compare to get a feel for whose process and estimation/cost standards are a good fit for you

     • You have time to get to know the contractor before entering into a financial agreement with them. They may have a fee for pre-construction services, but you will have the time it takes the design team to complete the construction documents and plan review to work with the contractor on preliminary selections, site prep, etc.

     • The contractor is ready to pick up the permit as soon as it is approved.

   • Cons:

     • Once the design is approved, if the contractor has input on changes that would significantly reduce their estimates, those changes will incur Additional Service Request (ASR) fees from the architect to make the changes to the design, carry those changes through the construction documents, and coordinate the changes with any consultants on the project.

   
   

4. Engage a Contractor After Permit Approval

   • Pros:

     • The design is complete, so there is less room for guesswork in bidding leading to a more complete bid/estimate

     • You can send the completed construction documents to multiple parties for competitive bidding, knowing each party is bidding based on the exact same information.

     • This is the easiest/most comfortable path for the architect

   • Cons:

     • You have no realistic idea how much the building you now have complete construction documents for is going to cost to build. While we may provide a ballpark per-square-foot estimate number for clients to begin budgeting, that number is a rule of thumb and does not reflect the ever-changing construction environments. Material costs rise and fall with politicians, labor costs do the same - but more importantly is availability of labor, which is the bigger concern in rural communities like ours in the North State.

       • For example - You might have an awesomely designed project with a cutting edge material that will create your dream home, but if no local contractors are interested in working with materials that are outside the box, you will have to pay an un-estimable premium to convince someone to take on the risk of building your project.

     • Your relationship with your contractor is likely going to be based largely on a financial agreement, without having built the trust and working relationship that negotiating decisions along the way creates.

     • This is easier for the architect, but puts the project at the greatest risk because the architect hands off the drawings without a pre-determined next step (i.e. there isn't a contractor on-board to hand off the project to), so it sits in limbo while the client waits on bids.