In an era where competition is fiercer than ever, sub-contractors are hard to rely on, good construction superintendents are hard to find, and general contractors struggle to make ends meet, owners should look for GC’s with a strong track-record and solid work-ethic rather than the cheapest bid when awarding their work. R. Scott Sandquist of AIA explains this concept well in the article below.
QUALIFICATIONS-BASED VS. LOW-BID CONTRACTOR SELECTION
Contributed by R. Scott Sandquist, AIA
Every owner should understand the different contractor selection methods available to them before entering into a contract. Two of the most popular contractor selection methods are low-bid and qualifications-based. In the low-bid method, the owner chooses a contractor based on the bottom line; the lowest bid earns the contract. The qualifications-based method allows the owner to choose a contractor based much more upon the contractor’s qualifications, experience, and perhaps most importantly, reputation.
TWO SELECTION METHODS
These two contractor-selection methods differ significantly in process for the owner. More important, they can generate quite different results. An architect should educate his or her clients about the contractor selection methods so the client can make the most informed decision. Since both methods potentially affect the level of service, it is only fair to explain the choice of methods in advance.
An owner who selects a contractor using the low-bid method should be aware of several possible consequences. First, the competitive bidding process assumes that all firms (including general contractors, subcontractors, and material suppliers) bid the work as cheaply as the designer’s specifications and drawings can reasonably be interpreted. This often unrecognized fact can influence the quality of construction tremendously.