CAI-NJ November 2020

What You and Your Board Need to Consider Before Hiring a Contractor By Eric Lecky, Executive Vice President, SageWater

W hen you are planning for a large capital improvement project, selecting the right contrac- tor for the work is the most critical component to the project’s success. You are usually looking for the best solution, price, process, credentials, and capabilities that they can bring to your community and project. It’s essential to examine bids and work through a contractor selection process to recognize potential risks and avoid them. As you evaluate contractors, the following considerations can guide you through making the best choice for your community and can help you to mitigate risk. Turnkey When a contractor tells you they can complete a “turn- key” project, do they really mean it, or are a number of building trades farmed out to subcontractors or other ven- dors? It’s important to ask about your contractor’s business model. In a turnkey system replacement, the contractor completes every step in the process. Who do their employ- ees actually work for? Are they direct employees of the company, or are they subcontractors or 1099 employees working as hired help? Contractors that rely extensively on subcontractors or 1099 employees can create a risk to your project because these so-called “employees” are not bound by your contract. The contractor has less control of them, their schedule, and their “on the job” performance. Project Management Some contractors will provide dedicated, on-site project managers who are available 24/7 should any issues arise. Others may split their project managers across two

or more jobs, meaning they are not always onsite and may not be as readily available to respond to problems and concerns. Does this matter to you? If so, it’s worth discuss- ing each contractor’s approach to project management. It’s also worth asking about their project manager’s experience managing your specific type of project. Some contractors’ project managers oversee multiple kinds of projects, and therefore, may have less experience with your particular project than a dedicated, specialty contractor. Communication Communication is probably the most critical aspect of any capital improvement project. Ensuring owners and residents know what will happen, and when, is vital for the project to run on schedule. Well thought out and timely communication eases pressure on the property manager and the board by reducing calls and complaints. Do you need paper notifications in the building, in the elevators, or posted on doors? Or are electronic notifications, via web- site, email, or text, a better way to communicate project updates with your residents. Every contractor communicates differently, so make sure that you select the one that best meets your community’s needs. CONT I NU E S ON PAGE 36

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