What should I check before hiring a general contractor?
Verify the state contractor license, general liability and workers compensation certificates, and bonding capacity first. Then compare bids against one written scope of work, confirm who carries permits and change order markup, and call references on projects of similar size. Knowing how to choose a contractor means reading documents, not brochures.
How to Choose a Contractor: The Traits That Actually Predict a Good Hire
Desirability in a builder is measurable. A contractor who says "we run a tight schedule" is making a claim; a contractor who hands you a schedule of values with 40 line items, a named superintendent, and a performance bond at 100% of the contract sum is showing evidence. Knowing how to choose a contractor means learning to separate the two.
Start with the documents. Ask for a bid package that separates labor, material, equipment, and subcontractor pricing, and check that each line names a unit, a quantity, and a measurement rule. A general contractor who cannot explain how a number was produced will not explain a change order either. Our construction estimate page shows the level of line-item detail to expect before you compare two bids side by side, and the difference between a construction budget estimate vs detailed cost estimate tells you which one you are holding.
The four things a contractor controls are scope, price, schedule, and risk, and each one leaves a paper trail. Scope lives in the written scope of work and Division 01 documents; price lives in the line-itemed bid; schedule lives in the milestone chart; risk lives in bonds, insurance certificates, and lien waiver language. If any of the four arrives as a verbal promise, treat it as unverified.
Good commercial contractor selection tips sound boring because they are procedural: verify the license number against the state database, confirm the certificate of insurance names you as additional insured, and read the exclusions page before the inclusions page. The questions to ask a contractor before hiring are mostly requests for proof, and a strong candidate answers them with attachments rather than adjectives.
Why references alone don't separate good from lucky
A reference list tells you a project finished; it does not tell you whether the project finished because of the contractor or despite them. Ask each reference for the original contract sum, the final change order total, and the days of delay beyond substantial completion. A builder whose change orders ran under 5% of contract value on three comparable jobs is a different candidate from one who simply has happy clients.
Call the reference's architect or owner's rep, not the contact the contractor chose. Ask what the RFI turnaround looked like and whether the contractor flagged drawing conflicts before they became field problems. Past performance that you can quantify beats a testimonial you cannot.
The four things a contractor controls: scope, price, schedule, risk
Map every candidate against the same four columns before you interview. Scope: does the proposal cite specification sections and drawing sheet numbers, or only trade names? Price: are quantities shown, or is it one lump sum? Schedule: are milestones dated and tied to long-lead submittals? Risk: are performance and payment bonds, general liability limits, and workers compensation coverage documented?
A contractor who is strong on price and weak on the other three is transferring risk to you. Owners who compare bids on total price alone usually discover the gap at the first change order.
Traits 1–4: What Makes a Contractor Desirable on Paper
The signs of a good contractor appear before mobilization, in the paperwork. Four traits carry most of the weight: itemized pricing, a written scope with real exclusions, a schedule with logic behind it, and insurance and licensing you can verify in minutes. Each is checkable, and each failure mode shows up later as a change order or a delay. If you inherit a bid you cannot audit, an estimate review and second-opinion audit can rebuild the line items before you sign.
| Trait | Document to request | What you verify | Failure mode if missing |
|---|---|---|---|
| Itemized pricing | Line-item bid by CSI division | Unit, quantity, and measurement rule on each line | Lump sum you cannot audit at the first change order |
| Scope definition | Written scope of work | Inclusions, exclusions, drawing revision, addenda cited | Disputes over omitted work after award |
| Schedule logic | Milestone schedule | Dated milestones tied to long-lead submittals | Completion date with no basis |
| License | State license number | Active status and classification match | Unlicensed work and permit rejection |
| Insurance | Certificate of insurance from broker | General liability, workers compensation, additional insured | Coverage gap during the project |
| Bonding | Performance and payment bonds | Capacity relative to contract sum | No recovery path if the contractor defaults |
Clear, line-itemed pricing instead of lump sums
A lump-sum bid hides the arithmetic. A line-item estimate lets you check the unit, the quantity, and the measurement rule for every major cost: 1,200 square feet of 5/8-inch gypsum board at a stated unit price, 340 linear feet of 2-inch conduit, 85 cubic yards of ready-mix. When a number looks wrong, you can point to the line instead of arguing about the total.
Ask for the bid broken out by CSI MasterFormat division so you can compare two contractors line by line. Bid leveling only works when both bids share a structure; otherwise you are comparing a summary to a spreadsheet. Our guide on how to estimate a construction bid walks through the structure we expect to see.
A written scope of work with inclusions and exclusions
The scope of work should name what is included and, just as important, what is not. Exclusions for final cleaning, permitting fees, temporary power, or owner-furnished equipment are legitimate when they are written down and priced separately. They become disputes when they surface after award.
Check that the scope references the plan set revision and the specification sections it was priced against. If an addendum was issued during bidding, the proposal should say which addendum number it reflects. A bid that cites no drawing revision is a bid you cannot hold anyone to.
Realistic schedule with named milestones
A schedule that lists only a start date and a completion date is a wish. Look for named milestones: foundation inspection, steel erection complete, dry-in, rough-in inspections, substantial completion, punch list closeout. Each milestone should have a predecessor and a duration you can sanity-check against crew size.
Cross-check the schedule against long-lead items. If switchgear or structural steel is quoted at 30 weeks and the schedule shows the gear set in 20, one of the two documents is wrong. That mismatch is one of the clearest red flags when hiring a contractor.
Licensing and insurance you can verify in an afternoon
How to check a contractor's license and insurance: pull the state contractor license number from the state licensing board database and confirm the classification matches the work and the entity name matches the contract. Then request a certificate of insurance directly from the broker, not from the contractor's file, and confirm general liability limits, workers compensation coverage, and additional-insured status.
Compare the certificate expiration date to your project duration. A policy that lapses mid-job leaves you exposed, and the pay application is the natural checkpoint to re-verify. Hold the first pay application until the certificates and the signed contract are both in hand.
Traits 5–8: What Makes a Contractor Desirable on Site
Execution traits decide whether the paper plan survives contact with the field. The question of how to hire a commercial building contractor usually turns on four things you can observe in the first 60 days: who runs the crew, how changes get approved, how often you hear from them, and what the closeout package looks like.
A named superintendent and crew continuity
Ask for the superintendent's name and resume before award, and put that name in the contract. Crew continuity matters more than headcount: a rotating crew relearns your site every week, and rework follows. Confirm whether the general contractor vs construction manager role is being performed by the same firm and who holds the schedule.
If the contractor plans to self-perform part of the scope, ask which trades and how many of their own workers. Subcontracted scope is fine, but you want to know whose state contractor license covers each portion and who supervises it.
Change order discipline and written approvals
A change order should state the scope change, the cost breakdown by labor and material, the schedule impact in days, and the signature authority. Verbal direction is how budgets leak. Require written approval before any work proceeds, and require that the change order reference the drawing or RFI that triggered it.
Track the running change order total against the original contract sum as a percentage. If changes cross 10% before the halfway point, the scope was either incomplete or the contractor is pricing omissions aggressively. Retainage on each pay application is your hold to keep closeout moving.
Communication cadence and progress reporting
A weekly progress report with photos, percent complete by division, open RFIs, and a look-ahead schedule is a leading indicator, not paperwork. Contractors who report on a fixed cadence surface problems early; contractors who report only when asked usually report late.
Ask during the interview how they handle an RFI that comes back with no answer in five days. The answer tells you whether they escalate, proceed at risk, or stop work. All three are defensible if written down in advance.
Closeout documentation as a leading indicator
The punch list, as-builts, warranties, attic stock, and final lien waivers show how the job was run. A contractor who kept submittals current and logged changes will produce closeout in weeks; one who ran on memory will take months. Ask to see a closeout package from a completed project before you sign.
Substantial completion is the milestone where retainage and lien waiver discipline pay off. If the contractor cannot describe their closeout sequence in order, treat the schedule for the last 5% as optimistic. Owners comparing bids can also send the plan set for a developer and owner estimate to benchmark the numbers before interviews begin.
4 Tips to Hire an Expert Commercial Building Contractor
A commercial owner carries exposure a homeowner never sees: retainage held for months, a payment bond running to a surety, and a building that must open on a lease date. The four steps below turn the selection into a document trail. Keep a contractor hiring checklist for owners that records what you received, from whom, and on what date, in the same spirit as the starting a construction company checklist a builder keeps on the other side of the table.
| Line item | Bidder A | Bidder B | Leveling note |
|---|---|---|---|
| Base structural concrete | $412,000 | $389,500 | Same plan set, Addendum 3 |
| Rebar allowance | $18,000 | $42,000 | Bidder A allowance below current mill pricing |
| Formwork unit price (per SF contact area) | $9.40 | $11.10 | Applied only to added pours |
| Fire sprinkler scope | Excluded | Included | Add $96,000 to Bidder A for comparison |
| Leveled total | $526,000 | $442,600 | Bidder B lower on equal scope |
Match the contractor's portfolio to your building type
Ask for three completed projects of the same occupancy and construction type as yours — a tilt-up warehouse, a wood-frame multifamily, a steel-framed medical office — with the architect's and owner's contact names. A firm that has built ten restaurants is not automatically qualified for a cold-storage shell. Verify each reference by phone and ask specifically about schedule performance and punch list closeout time, not general satisfaction.
Pre-qualify financially before you shortlist
Request a current balance sheet, a bank reference, a surety letter stating single-project and aggregate bonding capacity, and a certificate of insurance naming your entity as additional insured. Confirm workers compensation coverage with the carrier, not the broker's summary page. A contractor whose bonding capacity is smaller than your contract value will need your project to carry the risk.
Compare bids on the same scope, not the same total
A contractor bid comparison checklist should line up every proposal against the same plan set and specifications, CSI MasterFormat division by division. Build a bid leveling sheet that lists alternates, allowances, exclusions, and unit prices side by side. A low total that excludes fire sprinklers or site utilities is not a low bid. Ask each bidder to confirm receipt of every addendum by number, and reject any proposal that does not list them.
How to Choose a Contractor: Questions to Ask and Answers to Verify
Knowing how to choose a contractor comes down to asking questions whose answers can be checked against a document. Write the questions into your request for proposal so every bidder answers the same list, and require the supporting paper to be attached rather than promised. A verbal answer about bonding capacity or insurance limits is worth nothing at claim time; a certificate of insurance naming your entity as additional insured is worth everything.
Start with the license and the insurance certificate. Ask for the state contractor license number and the classification that covers your scope, then verify it on the state licensing board's lookup rather than on the contractor's website. Request a certificate of insurance showing general liability limits, workers compensation coverage, and an auto policy if crews drive to site, and call the agent to confirm the policy is current. A lapse in workers compensation is a common failure mode on small commercial jobs, and it surfaces only when an injury claim lands on the owner.
Move to capacity and past performance. Ask how many crews are active this month, which superintendent will run your job, and how many other projects that superintendent is holding. Request three references from projects of similar size and building type completed in the last 24 months, then ask those references about change order frequency, punch list length at substantial completion, and whether the schedule of values matched the pay applications. On the financial side, ask for the surety's name and the single-project and aggregate bonding capacity, and confirm the surety will issue a performance bond and payment bond for your contract amount.
Then test how the contractor reads a plan set. Ask which CSI MasterFormat divisions the bid covers, whether Division 01 general requirements are included or excluded, and who carries permits, temporary power, and final cleaning. Ask how they handle submittals and RFIs, and who signs off before a change order is priced. A contractor who cannot name the specification section behind a unit price is guessing. Owners comparing bids across trades often bring in a professional who we serve to level the numbers before award, because a low total built on a thin scope is the most expensive bid on the table.
Close the interview with the contract mechanics. Ask which agreement form they propose, whether AIA A101 and A201 or a custom document, and how retainage is released at substantial completion. Ask for a sample pay application and a sample lien waiver so you see the paperwork before mobilization, not after the first dispute. Record every answer in the bid tabulation, score the bidders against the same criteria, and keep the notes with the contract file.
Contingency range by estimate class
- Low contingency
- $150,000 (10%)
- High contingency
- $300,000 (20%)
- Budget range
- $1,650,000 – $1,800,000
Typical planning ranges that follow the AACE estimate-class idea: less design, more contingency. Set the final figure from a risk review of your own project.
Red Flags and Second Opinions: When the Numbers Don't Add Up
A bid that is 20% under the pack is not a bargain until you can explain the gap. Learning how to vet a general contractor means learning to read the omissions rather than the total.
| Check | Bidder A | Bidder B | Bidder C |
|---|---|---|---|
| Total bid | $318,000 | $402,000 | $441,000 |
| Divisions listed in proposal | 03, 05, 09 | 03, 05, 06, 09, 26 | 03, 05, 06, 09, 26, 31 |
| Drywall allowance stated | $0 (excluded) | $46,000 | $52,000 |
| Unit price for added ceiling | $6.10/SF, no cap | $7.20/SF, 8,000 SF assumed | $7.05/SF, 12,000 SF assumed |
| Written change order process | No | Yes | Yes |
| Certificate of insurance on file | Expired | Current | Current |
Bids far below the pack
Compare each total against the others and against your own budget estimate. A low bid usually means a missing scope item, an expired material price, or a schedule that assumes crews you have not seen. Ask for the division-level breakdown and check that every CSI MasterFormat division in the specifications appears. If the explanation does not hold, an independent estimate review and second-opinion audit gives you a line-item comparison before you sign.
Vague allowances and open-ended unit prices
An allowance of $25,000 for finishes with no basis of design is a change order waiting to happen. Open-ended unit prices — a per-square-foot figure with no quantity cap — shift risk to you after award. During bid leveling, ask each bidder to state the quantity their unit price assumes and the source of the allowance. Bidders who cannot answer are pricing an unknown, and you will pay for it later.
No written change order process
A contractor who says "we'll work it out" on changes has no process. The contract should reference AIA A201 general conditions or an equivalent, with a change order priced from the schedule of values and signed before work proceeds. Confirm the request for proposal asks for that process in writing. If the numbers still do not reconcile after leveling, professional developer and owner estimating from a second set of eyes is cheaper than discovering the gap at substantial completion.
A Contractor Hiring Checklist You Can Trace
A contractor's claim is only worth the document behind it. The checklist below maps each trait from this page to a specific paper you should receive before signing, so the hiring decision rests on evidence rather than rapport. Ask for each item in writing at the invitation to bid stage, not after award; a bidder who cannot produce a certificate of insurance during prequalification will not produce a better one under schedule pressure.
The last column is the one most owners skip. A price is a number, and a number needs a measurement rule. Before you sign, run the contractor's square-foot figure through the calculator below to confirm the scope it implies sits inside a plausible rough order-of-magnitude band for the building type and region. Enter the building area, your own base hard cost per sq ft, and your soft-cost, contingency and escalation percentages; the calculator returns hard cost, soft costs, contingency, escalation, the budget total and an all-in cost per sq ft. It carries no prices of its own, so the band is only as good as the inputs you supply.
Two documents deserve a closer read than the rest. A payment bond protects you if a subcontractor or supplier goes unpaid and files a lien, so confirm the penal sum covers the full contract value including approved alternates. A unit price schedule matters when quantities are uncertain: if rock excavation or unsuitable soil is priced per cubic yard, the unit rate and the quantity basis both belong in the contract, or the first differing field measurement becomes a dispute.
Red flags when hiring a contractor cluster around missing paper: no certificate of insurance naming you as additional insured, no license number you can verify against the state contractor license lookup, and a schedule of values that arrives only after the first pay application. Treat those as stop signs, not negotiation points. A firm that keeps its paperwork current is usually also the one thinking about how to grow a construction business past the next job.
To start, request a free quote and attach your drawings.
| Trait | Document to receive | What to verify |
|---|---|---|
| Coverage documented | Certificate of insurance; state license number | General liability and workers compensation limits; license status on the state registry |
| Bondable | Performance bond and payment bond commitment letter | Penal sum covers full contract value; surety rated for the project size |
| Scope-literate | Bid package with line-item breakdown by CSI MasterFormat division | Division 01 requirements acknowledged; addenda listed by number |
| Price-transparent | Unit price schedule and schedule of values | Unit rates, quantity basis and measurement rules stated in writing |
| Change-order disciplined | Sample change order and AIA A201 or equivalent general conditions | Markup percentages and time-extension terms fixed at signing |
| Payment-current | Sample pay application with lien waiver forms | Retainage percentage and waiver timing stated before mobilization |
| Closeout-ready | Sample punch list and substantial completion procedure | Deficiency turnaround and final waiver conditions defined |
Square-foot budget calculator
- Hard cost
- $444,000
- Soft costs
- $53,280
- Contingency
- $49,728
- Escalation
- $21,880
- Budget total
- $568,888
- All-in per sq ft
- $237
Enter your own base rate from a recent bid, cost book or estimator. The default values are placeholders for the math, not market prices.
Frequently Asked Questions
What questions should I ask a contractor before hiring them?
Ask for the license number and the state or local registry where it can be checked, then ask for certificates of insurance naming you as certificate holder. Follow with questions about who supervises the site, how submittals and RFIs are logged, what the change order markup is, and which projects of similar size they finished in the last three years. Ask for the answers in writing with the bid.
How do I verify a contractor's license and insurance?
Look up the license number directly on the state contractor license board's public database and confirm the name, classification, and expiration date match the entity bidding. For insurance, request a certificate of insurance from the broker, not the contractor, and call the broker to confirm general liability, workers compensation, and auto limits are current. Confirm the certificate lists you as certificate holder.
Why are contractor bids so different for the same project?
Bids diverge because each contractor read the plan set and specifications differently. One carries Division 01 general conditions in full, another omits submittal management, temporary heat, or final cleaning. Unit prices for concrete and steel change with supplier quotes, and some bidders exclude permits, bonds, or overtime. Bid leveling on a line-by-line schedule of values exposes those gaps before award.
What is a red flag when hiring a commercial building contractor?
A bid that arrives with no scope qualifications, no assumptions, and no list of exclusions is a red flag. So is a contractor who cannot produce a certificate of insurance from the broker, resists naming the superintendent, or asks for a large deposit before a contract is signed. Vague answers about change order markup and retainage also signal trouble.
Should I hire the lowest bidder?
Not on price alone. The lowest bid is often the thinnest scope: missing general conditions, no performance bond, or an allowance that will be consumed by the first change order. Compare bids on a leveled schedule of values, check bonding capacity, and confirm the bidder's past performance on similar work. A slightly higher bid with complete scope is usually the cheaper project.
How do I check if a contractor's estimate is realistic?
Rebuild a sample of line items: take the quantity from the plan set, apply the correct unit of measure, and compare the unit price against current labor and material data. Check that labor hours match the crew and duration in the schedule, and that Division 01 costs appear as their own lines. An estimate whose totals cannot be traced to quantities is a guess.
How do I choose a contractor when the bids are close?
How to choose a contractor at that point comes down to the non-price traits: license standing, insurance limits, bonding capacity, superintendent experience, and a safety record you can verify through OSHA data. Ask each finalist to walk one past project and explain a change order they issued. The answers separate the organized builder from the lucky one.
Do you sign NDAs before reviewing plans?
Clients can request a confidentiality agreement before sending drawings, and the terms are agreed before plan review begins. Send the request with the plan set so the paperwork is settled before any estimator opens the files. We do not claim a standard NDA policy; each request is handled as its own agreement.