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CHOOSING AND WORKING WITH A CONTRACTOR

(January 2006)

by Charles Plunkett, Artistic Builders, Inc.

What determines who the right contractor is for you? Just as there are many key ingredients that go into a successful development, there are many ingredients that go into determining the right contractor for your project. I believe that the single most important ingredient is TRUST. It has often been said that contractors are somewhat like used car salesmen, you never know for sure what you are getting. That combined with the fact that the typical owner/contractor relationship seems to be the owner on one side, the contractor on the other side and never shall the two meet. It is paramount that you hire a contractor that you feel you can place absolute trust in and that truly has your best interest at heart. In my operations as a contractor I realize that it is my job to help look out for the owner and help prevent him or her from making mistakes.

With trust being so important it is imperative that your contractor remove himself from situations that could give rise to questioning his motives. For this primary reason I do not believe that your contractor should provide market feasibility services. For a contractor who may be hired to construct a project to be involved in the decision as to whether or not the project should be built is a serious conflict of interest. This remains the same whether you pay the contractor for market feasibility work or he provides this free of charge. This does not mean that your potential contractor should not be involved in helping you determine the issues involved in building a facility at that location such as dealing with topography, soil conditions, building code requirements, etc. It means that the contractor should not be involved in determining whether or not there is a market to rent units and whether or not it is a good decision to develop that project. The same holds true for anyone who stands to profit from your decision to develop a project, other than the person or firm that you hire to perform a professional market analysis and rental demand feasibility study for you.

Other factors to consider when contemplating hiring a contractor are numerous and equally important. Space will not allow a total discussion of those topics, however, some issues to consider are as follows; experience, team attitude, depth of knowledge, track record, and dependability.

Experience is critical! You would not hire a doctor that just got out of medical school to perform heart surgery on you. Likewise, you should not hire a contractor who has never built self storage to construct your facility. Under a normal scenario to build an office building or restaurant an architect, engineer and/or a team of designers will prepare working drawings outlining how a project is to be built, then a contractor is hired to construct what is on those plans. It is becoming increasingly more common for the contractor of choice to participate in the process of designing a project and thereby assist in preventing costly mistakes and helping to ensure the constructability of the project. In self storage there are many issues that are distinct to this industry that are not issues in other types of developments. Therefore, it is even more important for the contractor to be involved in the design management of the project. If the contractor has no experience in this type of project it is difficult or impossible for him to be aware of those potential pitfalls and to help prevent them from happening during the design phase. It is much less expensive to fix problems on paper than in the field once construction is under way and something is being built wrong. Many times these mistakes happen even though the contractor is building the project exactly according to the plans and specifications. Someone just forgot or did not realize they needed to address an issue in the design phase and now the problem has become a reality. Even with the contractors input things can still go wrong. There can always be some issue that is unforeseen. The key is to work to minimize those issues.

This leads me to the next critical component, team work. Your contractor should be part of a team. I believe that the best working relationship is for the contractor to be viewed and to view himself as an extension of the ownership entity. The contractor should be the professional construction component of the team. The owner determines his needs, the architect helps interpret and design those needs, engineers help to determine exactly what to do, to ensure those needs work soundly and the contractor works with all of those entities to help make sure that the process is flowing together to produce the desired result. Our company is involved in many design meetings working with owners, architects, engineers, etc. to work through design and construction issues.

Your contractor must have in-depth knowledge about your business. While a typical contractor who is building a restaurant may not need to know about the food service business, in the self storage industry it is important that the contractor understand the business as a whole. Many owners/developers are building their first project and may not fully understand the business. The contractor should understand the effect that even a minor decision can make on the bottom line value of your project. The contractor can become a vital source of information and provide input for critical issues. Some examples of these situations are; turning radiuses for trucks entering the property, where and how tall to make steps in buildings, customer access to the office without access onto the site, how to set up the front counter and work area, etc. The list of these types of issues is almost endless. If the contractor has been in the industry for a lengthy period of time and dealt with these issues time and again he will have a vast pool of knowledge from which to draw information.

The next question to look at regarding your contractor is their track record. Are they able to bring projects in on time and on budget? You should not be disillusioned; every contractor occasionally has a bad project. For unforeseen, unusual or unmanageable reasons occasionally a project simply does not go well. The question is how is their overall track record? It is important to check references. Talk to people that they have built for both recently and in the past. Get an overall sense of the contractors’ performance. You can not make an informed decision based on one isolated project. It is also important to look at the types of projects previously constructed by your contractor. If your project includes a state of the art four story building you would not want to hire a contractor who has only constructed simple one story facilities. Some of the more complex multi story projects being built today can include complex designs, building code and fire department regulations.

It is vitally important that your contractor be dependable. The true test of any contractor is what he will do when there is a problem. How are warranty issues handled? When you call the contractor with a problem how will he respond? Any owner who has had trouble getting the contractor to come back and deal with warranty problems can tell you how much of a headache this can be. You have to have absolute assurance that you can count on your contractor to be there when you need them. When checking references you should ask these types of questions. Again, any contractor can have an unforeseen problem and need to come back and provide warranty or repairs. The question is how they perform in this situation.

In self storage more than other types of developments, it is important that your contractor be more of a development service provider than just a builder. This will help the overall process to go much more smoothly and be completed in a timelier manner. It is also very important that your contractor be flexible, not just intent on pushing a personal agenda or working to limit the scope of the project to match his own personal abilities.

There are various types of contracts to use as the basis for your agreement. Some create more of a cooperative arrangement between the owner and the contractor. Whatever form of contract is utilized it is best to create a transparent relationship between contractor and owner. By accomplishing this everyone knows exactly what is going on and where the project stands.

So, what contractor is right for you? You may feel that you are better off in hiring a local contractor. You may think that you should hire your friend or the contractor that built your office or home. In reality there are several very capable contractors who specialize in construction of self storage facilities. Those contractors routinely travel to other cities, states and various parts of the country to perform work of this nature. Having done this on a routine basis they are able to effectively compete with a local contractor, yet supply the additional knowledge and experience vital to your project. Some owners choose to act as their own contractor. If you are capable, have the knowledge, experience and time to perform this on your own then this may be an option for you. Many times owners undertake a building project on their own because they find it difficult to pay a contractors fee. Many of these owners later discover that it has taken them far longer to get the project done and they have more than paid for the contractors fee in the form of mistakes, repairs and delays. Many states have laws requiring contractors to be licensed so you must make sure that your contractor is licensed and in good standing with the licensing board before hiring that entity. Owners also need to be aware that the requirement to be licensed may include them as the owner if they are intending to act as their own contractor. The requirements to become licensed can range from relatively easy to extremely difficult and can require several months to complete.

In the end analogy I feel believe it is important to find a contractor that you think you can work with. You should have a good feeling about this member of your team and know that he is looking out for you and has the integrity, knowledge and experience to help see you through this exciting and challenging phase of development.

Artistic Builders, Inc. is based in San Antonio, Texas. This firm has specialized in the construction of self storage facilities for more than 10 years and has completed multiplied millions of square feet of self storage projects. Projects completed by Artistic Builders includes from simple single story facilities up to 5 story highly complex projects. Artistic Builders provides; value engineering, pre-development consulting and site constructability analysis, pre-development budgeting, design assistance and full construction services. Artistic is licensed as a general contractor from Florida to Hawaii and most states in between.

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