I left off breaking down my process for finding General Contractors and how I utilize their company website among other online resources as a pre-qualification tool.

If you followed my process to this point you’ve probably have yourself a good number of General Contractors on your list.

But what do you do with it now?

My next step, as the title suggests is about separating those who are qualified, from those who are not. The qualification process is how I narrow my list of General Contractors to the handful I want bidding on my project.

For those unaware, my primary investment strategy is constructing a legal second unit to bring in greater cash flow and increase the property value following my how to How To Make Money on an Investment Property?

Based on my strategy, I am not going to be looking for a General Contractor who specializes in remodeling or refinishing projects. I am looking for the General Contractor specializing in new developments, new homes, structural alterations, additions, and legal second units. My projects will be complex, have more moving parts, and therefore carry greater risk. For instance, to build a second or third unit the General Contractors require a sound understanding of building systems, building permit requirements, the Ontario Building Code, Ontario Fire Code, zoning provisions, etc.

Your General Contractor search and qualification process will be relative to your project’s scope of work. Your project may require a different type of specialist from my project, so adjust your qualifications to suit the specialist you need.

Hopefully, this is all making sense to you. I did say in the beginning that I am nothing if not thorough.

So then, what’s my next step?

First, I prepare a list of my qualification questions. I’ll be including these questions in an introductory email to all of the General Contractors still on my notepad or spreadsheet after the prequalification step from Part 3. I will proactively call each General Contractor on my list; introduce myself, provide a few details on my project’s scope of work and schedule in order to determine their level of interest and availability. Occasionally, the person answering the phone is an office administrator. I want to be speaking with an authority figure that can confirm their interest and availability. This is the individual I want to address my email to.

After having subsequent conversations with everyone on my list I’ll then follow it up with my email and qualification questions. My email will follow the general format shown below:

• Introduce yourself

• Provide a brief description of the project scope of work

• Include the expected project start and end dates

• Attach the qualification questions or put them in the body of the email, and finally

• Provide a deadline to respond

For efficiency, I send one email and blind carbon copy all Generals Contractors from my list. I find this two-step communication (phone call and follow up email) increases the number of responses I receive.

I’ll next go over the most important qualification questions you need to be asking.

To do this, I’ll first go back to my time as Project Manager:

In ICI construction (Institutional, Commercial, and Industrial) my qualification process would include asking a contractor to send me a copy of their CCDC 11 – Contractors Qualification Form. CCDC is an abbreviation of Canadian Construction Document Committee.

Anyways, not important… The CCDC 11 is the standardized form I used when qualifying contractors and subcontractors. It requests information about their company, capacity, skill, and experience.

Hey, if it can be used in qualifying contractors bidding on million dollar contracts, then I definitely want to request the same information from the General Contractors bidding on my residential project. That’s my rationale anyways.

So, you’re probably wondering how the information being requested in the CCDC 11 will translate into your qualifications questions.

I’ll give you the list of my 12 qualification questions and an explanation of each below.

1. What type of renovation do you specialize in?

   • I want to ensure the General Contractor specializes in the type of work I require and isn’t overpromising on their ability. They may have experience in multiple areas, or specialize in one specific niche. Find out.

2. Who is your primary clientele?

   • It would ideal if they’ve worked with other investors in the past. Not necessarily a requirement.

3. Do you self-perform work or do you subcontract all work? Can you provide a list of the subcontractors you regularly use?

   • I want to know who’s going to be working on my project and ensure they’re licensed and qualified as required (ie: electrical).

4. How long have you been in business?

   • If they’ve only been in business for 1 to 3 years I need more information to confirm they can perform. If they’ve been in business for 5 to 10 years it shows they have some longevity.

5. How many people do you have on staff?

   • Is it a one person show or are there several people working between the administrative, accounting, sales, estimating, project management, and supervising roles.

6. How many projects are you currently working on?

   • I want to know how busy they are, how long it will take them to start, and how much time they’ll be able to devote to my project.

7. How many projects have you completed in each of the last 5 years? What was your average value per project?

   • This tells me how busy they’ve been and the complexity of projects they’ve been working on. If the number of projects and average value per project increases each year that is an indication they are growing.

8. Are you familiar with the Construction Lien Act and holdback requirements?

   • Refer to Know These 20 Construction Contract Terms, Holdback.

9. Do you have a draft copy of your bid/quotation/contract that you can send me?

   • By receiving a copy of their standardized bid/quotation and contract I can apply the terminology from Know These 20 Construction Contract Terms and look for red flags.

10. Are you registered and covered by WSIB (Workplace Safety and Insurance Board) in Ontario? Please send a copy of your current WSIB certificate.

    • This is to protect you from any liability should a worker be injured on your premises. Refer to Know These 20 Construction Contract Terms, Workplace Health and Safety.

11. Do you have General Liability Insurance? Please send a copy of your coverage.

    • A reputable General Contractor will provide proof of insurance without hesitation. If they won’t, I would not work with that General Contractor. Refer to Know These 20 Construction Contract Terms, Workplace Health and Safety.

12. Please provide a list of five projects with a similar scope of work and duration to my project. Include references and their contact information.

    • I want to contact their references, and ask the same types of questions I would ask the other Project Managers in my office. Go back to How to Find a General Contractor where I mention the specific questions I ask referrals.

At this stage, you should now be ready to start proactively calling each General Contractor on your notepad or spreadsheet. Begin drafting your introductory email and your own qualification questions.

Remember from the layout I provided above to include: a bit about you, the project scope of work, the project start and end dates, your qualification questions, and the deadline to respond.

Format your email and save this as a template, so it can reused for all future projects.

I’ve now given you my process for qualifying General Contractors that you’ll be able to repeat over and over again.

As the responses starts coming in you’ll want to update your notepad or spreadsheet with all of that information. Make sure all of the qualification questions you asked are sufficiently addressed in the responses you receive.

If details are missing send a follow up email requesting the missing information. Clarify any questions you receive in return from the General Contractors as required. When you’ve received enough responses, start analyzing them. Make sure they meet your requirements.

Remember that you are the client offering them an opportunity to win your business. Responses, or lack thereof, will tell you whether they’re interested in working with you or not. Keep this in mind.

When you have yourself a qualified list of General Contractors you’ll be in a position to move on to the bidding process. While I will not getting into the specifics of the bidding process here; I do recommend approaching a qualified designer or consultant, such as Infinite Design Services, who is well-versed in it. Infinite Design Services can guide through the bidding process, including preparation of the construction documents, scope of work, specifications, schedule, and drawings. We can even conduct the onsite walkthroughs with the General Contractors, so you don’t have to.

My final step is coming up where I will show you my system for reviewing and comparing General Contractors, so that you can make an informed decision on who you’ll be hiring for your next project.

Stay tuned for that!