04 Nov Finding the Right Contractors: Vetting and Tender
So you’ve planned your project, your budget is sorted and all that remains is finding the right contractors. To do this you will need to know how to conduct your own vetting process. Many ideas expressed in this post are aided by the information in our previous post: how to avoid cowboy builders. Whilst you don’t need to read that post to follow along here, we strongly recommend taking a look so that you have all the tools you need to ensure you’re hiring the right contractors.
Finding the Right Contractors
The first step in finding a good contractor is simply knowing where to search. For this we’d highly recommend using a customer review site that has some form of vetting process. This vetting will act as the first filter in finding quality contractors. Here are a few examples of good sites:
Once you have finished your searching and contacted a selection of interested contractors you will need to start your own vetting process. Below are a few different areas you might wish to consider in your vetting process.
Insurance Document / Companies House
Every contractor should have as a minimum ‘employer’s liability’ and ‘public liability’ insurance. They will be able to produce a certificate to prove this. However, this certificate does not guarantee the insurance is currently valid so you should also double check online.
If your contractor is a limited company you can check their details online at: https://www.gov.uk/government/organisations/companies-house
This site will give you some solid background information on the business such as when they were incorporated, who the directors are, their business address and even previous financial records if you’re willing to pay for them. All of this ties together to ensure they are who they claim to be.
Finding the Right Contractors Through References
Another good thing to check for is their previous work. Any decent contractor will have no issue with you taking references for their work. If they do have an objection, then this should be a pretty clear warning they have something to hide.
When getting references, you should make a point of seeing at least one of their previous projects in person, and preferably you’d be able to visit a site they are currently working on. In addition to this visit, you should also ask for two additional references that you are able to call and get some customer feedback on. Some good questions to ask include:
- How long ago did they complete the project? If it is more than a year, consider why they did not
give you a more recent reference.
- Did they complete the project within the set budget? If not, try to find out why the project went
over budget. Not every project can be budgeted perfectly so finding out where the mistakes lie and by how much the budget was exceeded can give you a good understanding of how this
contractor may operate.
- Were they clean and tidy each day whilst working? Your contractor will be working within your
home and should leave it in a healthy state every day for you.
Deposits and Retentions
The financial part of your project is of the utmost importance and if managed correctly can keep you clear of court, even if the worst should happen e.g. The contractor doesn’t complete your building works.
First things first, you shouldn’t be paying deposits. This is an important rule to maintain when searching for contractors as it prevents money being lost to rogue traders. This extends even further however, as you should not be paying for work that has yet to be carried out either. Through negotiation with the tradesman you may even offer to pay merchants directly for materials if your contractor doesn’t have the financial backing to cover the cost of materials upfront.
Another thing to bear in mind is that during the work, it is quite common things will arise which you may want rectified or tided up, this is called ‘snagging’. Snagging can take anything from a few hours to a few days depending on the size of the project you are undertaking. When negotiating with your contractor it is advised you ask them what retention is held for snagging. You can expect to hold anywhere from 5% to 10% which is then paid upon completion of all snagging.
e.g. A £6000 Bathroom Refurbishment
- Once ripped out invoice – £1000 (You would pay £950 as you hold 5% for snagging)
- Once first fixed and tiled – £3000 (you would pay £2850 as you hold 5% for snagging)
- On practical completion – £2000 (you would pay £1900 as you hold 5% for snagging)
Once completed you would then Snag the project – for instance the silicone work may need touching up or some grouting re-done that is too shallow. Once completed you make this final £300 payment (Money retained for snagging) straight away. If the contractor didn’t return to complete the snagging you have £300 to hire a tradesman for a day to tidy up the bits you want doing.
Payments and Invoicing
Lastly, the matter of payments can often be a difficult hurdle to tackle but it’s deeply important you cover this before confirming any contractors. We strongly recommend that you first create an itemised list of works due to be carried out and then make payments in accordance with this itemised list. That way, you’re only paying for completed work.
Often times, a contractor may request to take a ‘draw down’ and this is done on a percentage basis. For instance, if your job is worth £10k, they may say to you they would like to draw down 25%. This means they are asking to be paid £2.5k. The trouble with this, as a client, is that you won’t know if the job is actually 25% complete. To preempt this, you should ask the contractor, prior to confirming their contract, to break down the job into phases and make payments against the completion of these phases. This has two major benefits. Firstly, it is much simpler than the individual line items. It also gives you something clear to measure against when making payments.
Hopefully this post has made finding the right contractors a much easiesr task. With this information, and all the previous posts we’ve shared, we have nothing left to prepare you to start your project. That doesn’t mean we’re done though. We’ll have more to share about the mid and post-project process coming soon so be sure to stay tuned.