Hiring a Contractor on a Privately Funded Building Project

December 7th, 2023 | 8 min. read

Hiring a contractor can be an intimidating experience for some building owners—especially those taking on their first project. With your budget and schedule at stake, it’s important to find a trusted partner who understands your project’s goals.

Methods for hiring a contractor differ depending on funding. While most publicly funded projects must go through a public bidding process, private owners like businesses and nonprofits can hire a contractor directly.

We have helped many private organizations vet potential contractors and find someone who fits their needs. To help you with your selection, this article will discuss how to hire a contractor on a privately funded project and vet potential options.

Ways of Hiring a Contractor on a Privately Funded Project

While private owners can use any project delivery method, many opt for a negotiated contract. With this method, the owner has one contract with the architect and one contract with the contractor, rather than a combined design-build agreement. The owner also hires the contractor directly instead of going through a public bidding process.

Some owners begin working with a contractor before hiring an architect. They may have a pre-existing relationship with a contractor and use the contractor’s industry knowledge to find a suitable design team.

Other times, the owner will hire an architect first. Depending on the owner’s needs, the architect can recommend contractors based on the project type and the contractor’s experience.

The architect can also assist with writing a Request for Proposal (RFP) and partake in interviews. Although the architect may be involved in the hiring process, the decision is up to the owner.

Occasionally, an owner may choose to solicit bids from a pre-selected group of contractors. Unlike public bidding, the owner can specify which contractors can participate, narrowing their options.

This approach helps the owner get the best qualified contractor for the best price. It also works well for projects receiving some form of public funding. Depending on the funding method, the owner may be required to solicit bids from a set number of contractors.

Selecting Subcontractors

Often, subcontractor selection is the contractor’s responsibility. They may hire subcontractors directly, choosing partners qualified to perform the work. Other times, they may solicit bids from subcontractors to help manage costs.

Although contractors manage subcontractors, owners can participate in the selection process. Some may wish to interview major trade partners like Mechanical, Electrical, and Plumbing engineers (MEP) who are involved in all project levels. In short, a negotiated contract allows the owner to choose their level of involvement when it comes to subcontractor selection.

Vetting Potential Contractors

Owners have many considerations when hiring a contractor. In addition to matching your price point, you need a team with the experience and reliability to bring your project to life.

If hiring a contractor for the first time, your architect can help vet options by providing a list of criteria. Some factors you may consider include:

Purpose and values: Does this contractor align with your organization’s values? Do they understand your vision? Some may look for a contractor that aligns with their Diversity, Equity, and Inclusion (DEI) or sustainability initiatives.
Location: Is the contractor local to your area? Some organizations may want to support local labor by hiring someone near the project site.
Proven trust: What is the contractor’s reputation? It helps to ask about the contractor’s experience with maintaining schedules, delivering on-budget, and completing construction closeout.
Architects’ experience: Has your architect worked with the contractor before? Was it a positive experience? Pre-existing relationships can lead to smoother communication throughout construction.
Client experience: What do previous clients say about the contractor? It helps to ask for references in an RFP.
Experience with your project type: Does the contractor have experience with similar building projects? The contractor should be able to manage the project’s size and complexity.
Priority: What level of priority is your project for the contractor? How many other projects are they completing? Aim to find someone who has the time and labor resources to complete your project.
Sustainability experience: What is the contractor’s experience with sustainable design and construction? Depending on your goals, you may ask about their experience with building certification systems like Leadership in Energy and Environmental Design (LEED), Passive House, or Living Building Challenge (LBC).

Your architect can develop these factors into a matrix to score and rank your options. Some categories may be weighted more heavily than others to help you find the best fit.

Learn About Your Architect’s Role in Construction

Hiring a contractor is a crucial step in any building project. While most publicly funded projects use public bidding, privately funded projects have more delivery method options, including Design-Build, Construction Manager at Risk, Construction Manager Agent, and negotiated contracts.

If you use the negotiated contract method, you will hire a contractor directly. Your architect can help you through this process by providing recommendations and assisting with interviews. Pointed questions about the contractor’s experience, reputation, and values can help you find someone who aligns with your goals.

During construction, your architect will coordinate communication between you and your contractor. They will also visit the site and check that the work meets the design intent. Learn more by reading about an architect’s role in construction.