A common topic of discussion during almost every building project involves the selection of the contractor. More often than not, veterinarians looking to construct their first hospital aren’t sure how to proceed. They might know what they want, where the hospital will be located and how they’ll pay for it, but all the planning in the world won’t help if the builder is either incapable of the work or has other ideas about what is needed. In the first of a two-part series, I’ll tell you how to select a builder.
Q. In my area, some contractors are small shops that primarily build small-scale projects like mine while others are quite familiar with health care and have constructed human hospitals. Which is the better choice?
A. Veterinary professionals know that animal hospitals are quite different from other health care facilities, but under the building code, a veterinary clinic is no different than an accountant’s or insurance agent’s workplace. Contractors used to those types of build-outs might not fully grasp the reasons you specify things like higher-performing floors or advanced HVAC systems. Builders who don’t understand the differences and think “what we always use is good enough” might make the wrong substitutions. Conversely, builders familiar with health care might stray too far in the other direction. Because human hospitals have redundancies and high-end control systems, those builders might assume you need the same infrastructure, and their bids reflect that view. Neither situation is helpful to you.
Q. What should I look for in a contractor?
A. Assuming a contractor does quality work and has good business practices, its size is not the most important criteria. Finding a builder with experience in your project type is always best. Your project doesn’t need to be anyone’s learning curve. Ideally, the contractor has completed several clinics in your area that you can see first-hand. You should speak with the hospital owners to learn about the construction process.
Construction is a complex endeavor, so expecting to find a builder who’s never had a problem is unrealistic. What’s important is to learn how the problems were resolved. Check with the Better Business Bureau and your state’s licensing board to find unresolved complaints. Not every complaint is legitimate, but if an otherwise well-reported builder has something on file, investigating further is usually worth your time.
Q. How do I find a great contractor?
A. By far, the best way is through personal references. You might know someone who recently completed a veterinary project. If you are active in your professional association, send a query to see who had a good experience. If you can’t find someone, maybe you know another business owner who completed a project of similar complexity.
The desired number of kennels and their sizes can be accommodated when they are part of the construction blueprint.
Lacking direct referrals, you could ask members of your project team. Your architect, banker or insurance agent, or even a construction supplier or city building department employee, might recommend someone. Ask not only for their top choices but also about contractors to avoid. Interview three to five construction firms, and ask those you feel good about to bid on the project. You might hold an open bid, inviting all interested companies to submit a proposal. If you do, be cautious. Open bidding can attract a large response, but you will have no way of knowing the quality or capacity of most bidders without your doing considerable research. Also, their lists of exclusions will not be identical, making direct comparisons difficult.
Q. My cousin is a builder. Why not hire him?
A. I caution against selecting a contractor based on a personal relationship. I know of several situations where a practice owner hired a relative to be the contractor, but the company did not have the expertise or sufficient resources to do an excellent job. Such a result is never good and can cause lasting damage to both the business and relationship. This goes not just for general contractors but for subcontractors as well. The brother-in-law plumber can end up being a problem.
You might be tempted to hire clients who do contracting work. Giving back to the people who support your business is understandable. In many cases, clients who are qualified contractors can be a great fit, but don’t settle for “probably good enough” when you make what likely will be your biggest professional financial investment.
Q. Why do I need a builder experienced in animal care projects? Don’t all builders just follow the plans?
A. Plans aren’t always followed. Good companies will work to understand not only the plans but the reasons behind them. Some builders have standard ways of doing things and are reluctant to change. They might insist on design modifications to fit “the way we build.” Others might analyze the plans, purposefully looking for places to substitute so that their bids will be lower than the competition. These modifications are not always clearly spelled out in the bid. Should a company win the project and get called out later because of alterations to the plan, the responses might be “That’s the way I bid it” along with a change order that costs you more money. Builders that live by the change order or try to “buy the job” should be avoided.
Q. Why not just pick the lowest bid? What do you mean by “buy the job”?
A. Buying the job is an expression that means the bidder intentionally underpriced the work with the expectation that change orders will be made after construction is underway and you have committed to the builder. The building community generally deems such practices as deceptive.
Change orders are often warranted, but requesting one based on profit is not. What you want is the best value at a fair price. Honest bids for a given amount of work should all be in the same general range. Outliers, both high and low, should be looked at skeptically.
Q. Shouldn’t my architect know what my building will cost?
A. Laymen often are perplexed by the lack of certainty with construction costs. The fact is, construction involves a huge number of shifting variables. Without real-time, quantity-based pricing from vendors and subcontractors, the best history-driven estimate will be plus or minus 20% for rough initial budgeting only.
I encourage my clients to include the builder as early in the process as possible. Modifying and staying within a budget is much easier and less expensive when the builder is involved from the start.
Remember that every building is a prototype. A specific building on a specific site at a specific point in time has never happened before or will again.
Over the past 10 years, the average cost of a U.S. general practice hospital was $242.50 per square foot for the building only. That’s a valuable data point, but it cannot predict your final cost. The number says nothing about the cost of land and land development, soft costs, and mortgage rates. The only one who can quote a price is the builder, and even then the cost is good only for a limited time.
In part two, I will cover the four most popular project delivery options.
What’s underneath a veterinary practice is just as important as what’s on the inside and outside.