Co-op Board Learns That a Cheap Contractor Can Get Expensive

As part of our Problem Solved series, Habitat interviewed Anita Konfederak, the senior vice president at Merritt Engineering Consultant.

You’ve been overseeing facade work at a 17-story co-op where the board chose a low-bid contractor that you had concerns about. When did you become concerned, and why?

On this particular project, we recommended some contractors, and the manager and board did as well. One of the bids was quite low, and that was the first trigger that made us worry a little bit. 

As soon as we saw that the bid was low, we started the discussion with the contractor, asking him whether he had worked on similar projects in the past. In this particular case, the building would require a large pipe scaffold to be installed around it. The building needed a site-safety plan, plus it has terra cotta on it. So those were the kinds of questions we asked to see whether the contractor has worked under these conditions and with these types of materials.

What did you learn?

This contractor had not worked on a project of this scale in the past. So that was a big concern. First, we tried to straighten out the bid, and then we tried to flag to the manager that maybe even though this contractor has a great price, it might not be the one to hire for this project.

Did the board go ahead and hire the contractor?

Unfortunately, yes. Currently we're under construction, and there are problems. There are some protocols that you have to follow in order to notify adjacent buildings, install the pipe scaffolding and complete the site-safety plan. Those are difficult things to do, and an experienced contractor can usually take care of them within two to six weeks. Unfortunately, if a contractor is not experienced, there are stumbling blocks. For example, when installing the sidewalk bridge, this contractor wasn't doing the due diligence to check if there's a vault under the sidewalk. If you don't know such things, it just takes longer and, as you know, more time means more money. 

So the contractor didn't check if there was a sidewalk vault. How do you monitor that?

We as engineers start off by reviewing product data, shop drawings, insurances, a lot of documents. And that's when we start to pick up things when they're not done correctly or in a timely fashion.

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Does this result in a lot of change orders?

Certainly during construction, if they're not experienced with the actual materials and repair methods. For example, it was very clear in the documents that on this particular project we wanted to have planking on every floor of the pipe scaffold so that we would have access all over the place at all times. This contractor bid that he was going to put planks on two levels and then move the planks as he went along. Something like that delays a project.

So when dealing with an inexperienced contractor, those kinds of things come up during construction. Also, a typical contractor knows that an engineer wants to see the mock-ups on materials, procedures, waterproofing, membrane procedures and how to anchor stones – so that everybody on site knows how to do it correctly.

This board hired an inexperienced contractor at a very attractive price. Is there anything a board can do to protect itself once it has made a deal with this kind of company?

Boards can protect themselves beforehand. We highly recommend that boards  interview the three low bidders, even if it's for only a half an hour. In this particular case, there was no board interview with the contractor. So even though we had this gut feeling that we're going to run into problems with this guy, the board might've gone purely for the price. So before hiring, it's very, very important for the board to interview contractors, ask questions and get a good feeling.

And then what can the board do during construction? It's nice if a board is involved, and sometimes there are construction committees set up by the board, one or two members. It's nice if those people come to the construction meetings and participate and see what's going on so that they're not surprised when they see that either their engineering cost is going up or their contractor's asking for a lot of change orders. 

What’s your takeaway for other boards?

I highly recommend when you're dealing with a larger project, you should use an experienced contractor. Also, listen to your engineer. We've been doing this for 30 years. Engineers can save you a lot of grief in the long run.