How to Choose the Right Building Contractor

Procurement

How to Choose the Right Building Contractor

Selecting the wrong contractor is one of the costliest mistakes you can make on a construction project. Here is how to get it right.

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Godfrey & Godfrey Consulting
••5 min read
How to Choose the Right Building Contractor

Choosing the right contractor is one of the most consequential decisions you will make on any construction project. Get it right and you have a professional, reliable partner who delivers your project on time and on budget. Get it wrong and you face delays, disputes, and costs that can dwarf the original contract sum.

Yet many clients approach contractor selection with surprisingly little rigour — a recommendation from a friend, a quick Google search, and a gut feeling. Here is a more structured approach.

Start With a Proper Longlist

Before you can select a contractor, you need a credible pool to choose from. A longlist of six to eight contractors is a reasonable starting point for most projects.

Sources for your longlist:

  • Personal recommendations from architects, other consultants, or clients who have used contractors on similar projects
  • Trade bodies — the Chartered Institute of Building (CIOB) and the Federation of Master Builders (FMB) maintain directories of vetted members
  • Contractor registers — Constructionline and similar pre-qualification databases hold financial and compliance information on thousands of contractors
  • Previous projects — if you have seen work you admire, find out who built it

At this stage, you are looking for contractors who are broadly appropriate for your project in terms of size, type, and location. A contractor who specialises in large commercial fit-outs is unlikely to be the right choice for a residential refurbishment, and vice versa.

Pre-Qualify Before You Tender

Sending tender documents to eight contractors wastes everyone's time — including yours. A pre-qualification stage narrows the field to three or four genuinely suitable candidates before the formal tender process begins.

Pre-qualification should assess:

Financial standing. Request the last two years of audited accounts. You are looking for a contractor who is financially stable — not one who is trading on thin margins and might struggle to complete your project if cash flow tightens.

Insurance. Verify that the contractor holds adequate public liability insurance (typically £5m minimum for residential projects, £10m for commercial) and employer's liability insurance. Ask for certificates, not just assurances.

Relevant experience. Ask for examples of three to five comparable projects completed in the last three years. Comparable means similar in value, type, and complexity — not just "we've done refurbishments before."

References. Ask for contact details of clients from those comparable projects. Actually call them.

Health and safety. Request the contractor's health and safety policy and their accident frequency rate. On larger projects, ask for their Construction Phase Plan from a recent project.

Run a Proper Tender Process

Once you have a shortlist of three to four contractors, the tender process begins. This is where a quantity surveyor adds significant value.

A well-run tender process includes:

Comprehensive tender documents. The contractor should be pricing from a complete set of documents — drawings, specification, bills of quantities or schedule of works, and the proposed contract form. Gaps in documentation lead to gaps in the price, which become claims later.

A tender period of three to four weeks. Contractors need adequate time to price properly. Rushing the tender leads to poorly considered prices and missed items.

A mid-tender meeting. A site visit and Q&A session with all tenderers present ensures that everyone is pricing the same scope and that queries are answered consistently.

A tender return deadline. All tenders should be returned by the same date and time, unopened until that point.

Analyse the Returns Properly

When tenders come back, resist the temptation to simply appoint the cheapest. A QS will analyse all returns in detail, comparing like with like and identifying anomalies.

Key questions to ask of each tender:

  • Are there any qualifications or exclusions that reduce the apparent price?
  • Are there any items that appear to have been missed or significantly underpriced?
  • Is the programme realistic?
  • Are the preliminaries (site management, welfare, plant) adequately allowed for?

A tender that is significantly lower than the others is a warning sign, not a windfall. It usually means something has been missed — and that something will resurface as a variation claim once the contractor is on site.

Check References — Properly

Most clients ask for references. Few actually use them effectively.

When you call a reference, go beyond "were you happy with the work?" Ask:

  • Did the project finish on time? If not, why not, and how did the contractor handle it?
  • Did the final cost match the contract sum? If not, by how much, and were the variations properly managed?
  • How did the contractor communicate during the project?
  • Were defects dealt with promptly after completion?
  • Would you use them again?

The answers to these questions will tell you far more than a written reference ever could.

The Contract Matters

Once you have selected your contractor, the contract you sign is your primary protection if things go wrong. Use a standard form — JCT Minor Works, Intermediate, or Standard depending on the project value and complexity — rather than a contractor's own terms and conditions.

A QS or Contract Administrator should review the contract before it is signed, ensuring that the risk allocation is appropriate and that the key commercial terms — payment terms, retention, liquidated damages, practical completion — are properly defined.

The Bottom Line

Contractor selection is not a process to rush. The time invested in proper pre-qualification, a well-run tender, and thorough reference checks pays dividends throughout the project — and protects you from the very significant costs of appointing the wrong contractor.

If you are planning a project and would like support with the procurement process, we would be happy to discuss how we can help.

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#contractor selection#procurement#tendering#construction#due diligence
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