Tips for Finding a Good Contractor

08/12/2008

We have all heard the mantra of our troubled economic times. A falling dollar. Rising materials costs. Downward spiraling real estate values. Skyrocketing fuel prices. Volatile, uncertain stock markets, and major financial institutions posting unthinkable write-downs. The economic game is different now, and anyone who clings to the conventional will be left on the sidelines.

Although the timeshare industry remains robust, developers and builders must factor in economic realities to remain profitable. Conventional thinking simply will not do-now is the time to be different. It is time for developers to work more closely than ever with contractors, architects, engineers, designers, and subcontractors to form the strategic partnerships that can return genuine value.

Value-Added
By bringing such a partnership onboard at the very start of a project, a developer is positioned to create a construction plan and scheduling strategy that can be most effective in offsetting rising fuel and materials costs. Why is this approach so important?

Let's take a look at some real numbers. Start with the price of diesel fuel. The Energy Information Administration reported the nationwide price of diesel at $4.18 a gallon at the end of April 2008. That is an increase of over $1.37 from the same time last year, and as anyone who has been to the pump knows, diesel prices have only increased more. The price of diesel has a major impact on everything from site excavation and running construction equipment to the cost of materials delivery.

Other crucial construction cost components are also rapidly rising. For example, the Engineering News Record reports that asphalt prices are up 58.3% over the past four years and that copper piping has risen 7.6% since last year. With much of our steel and concrete coming from sources outside the country, the falling value of the U.S. dollar is also leading to regular price increases. To offset these increases, developers and their construction teams must do things differently.

A smart start includes bringing the contractor to the table as early as possible into the design cycle. This enables the contractor to work with design teams to provide true value engineering at very early date. This establishes an accurate account of necessary construction materials in very timely fashion. By making construction materials purchases early, buying smart, and obtaining bulk discounts, the project gets a realistic hedge against cost increases.

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