Critical Questions to Ask Your General Contractor Before Entering Into a Contract

Choosing the right general contractor for your construction project is critical. Before entering into an agreement with a general contractor, it’s important to ask questions to ensure they are the right fit for your project. Some questions and topics can include the following:
1. What is your experience in this type of construction project?
Understanding the general contractor’s experience is essential. Ask about their experience in projects similar to yours, as well as their track record of completing projects on time and within budget. This will help you assess their expertise and determine if they are well-suited for your specific project.
2. Are you licensed and insured?
Verifying the general contractor’s licensing and insurance is crucial for your protection. A licensed contractor demonstrates compliance with regulatory requirements, while insurance coverage protects you against any accidents or damages that may occur during construction.
3. Can you post a performance and payment bond for the project?
If your general contractor is new to the business, or even if they are an established company that has been around a while, owners should strongly consider performance and payment bonds in order to protect the owner’s interests. A performance and payment bond is a bond, in double the amount of the contract, to insure (a) that the project is performed at cost and (b) that all subcontractors and suppliers are paid. Some contractors may not have the credit or collateral to post a bond, and that is a red flag if that is the case.
4. Do you have a network of reliable subcontractors?
General contractors typically work with subcontractors for various aspects of the project. Inquire about their subcontractor selection process, names of subcontractors, etc. to ensure that the contractor can contract with qualified subcontractors who will deliver quality work.
5. How do you handle project management and communication?
Communication is important to keep the construction project on track. Ask how the contractor manages its projects, how they communicate progress with the client, and their preferred method of communication. This will help ensure that everyone is on the same page throughout the project. It will also give you an idea of what to expect and how to increase communication through the project.
6. What is your proposed timeline for completing the project?
Understanding the estimated timeline for completion is essential for planning and coordination. Request a detailed project timeline from the general contractor and inquire about any potential factors that may cause delays. Often contractors will not want to commit to a date set in stone, and again this should be a red flag. As long as the contract is written in such a way to protect the contractor from unforeseen delays, the contractor should have no problem committing to a set completion date.
7. How do you handle change orders and additional costs?
Change orders are common in construction projects. Discuss how the contractor handles change orders (both owner directed changes and changes for unforeseen work), including any associated costs (time and material costs, lump sum with overhead and profit, etc.), to avoid surprises down the line. Ensure that the process for approving and documenting changes is clear.
8. What are the payment terms and schedule?
Clarify the payment terms and schedule with the general contractor. Understand when and how payments will be made, and ensure these terms are agreeable to both parties. Owners should withhold at least 10% of the entire project amount as retainage. For the other 90%, will the contractor invoice by the amount of work performed each month, invoice when certain milestones are met, or some other way?
By asking questions, you can gain a greater understanding of the general contractor’s qualifications and approach to the project. This will help you to decide if the contractor is a good fit, and it will hopefully ensure a successful partnership and a smooth project.