To Use or Not To Use A Building Contractor in a Project

Most of my clients would ask whether it is necessary to use a building contractor in their projects.

Well, its not always necessary, especially for small projects. But at the end of the day, someone MUST be the building contractor in the project. And if there is not building contractor appointed, then usually, the owner of the project takes up all the roles and responsibilities of the contractor.

First, it is important to understand the role of a building contractor in a construction project. A building contractor would plan and coordinate all the activities that result in the construction of a building/structure.

Looking at the specifics, there are many duties that a building contractor must complete on a daily basis. They implement the project plans, hire and supervise staff, procure and manage materials, build as per the laws and regulations of that area, manage the budget to ensure that the project is completed within the planned costs, and at times, the building contractor may also partly finance the project depending on the specifics of the contract signed. This happens since they use their funds to carry out works until these are valued and paid for by the owners.

For all the above, the building contractor would definitely charge a ‘management fee’ which would range between 5% to as high as 50% depending on how efficient, or cunning they are.

This is always a potential for saving for any individual if they choose not to use a building contractor but it does not come free. It requires your time since all these saving would go down the drain through inefficiencies and pilferage if there is no one to manage the process.

For projects where all funds are available, no matter how small they are, i always advise my clients to get a qualified, registered building contractor to carry out the works. My client’s responsibility is usually toned down to inspecting the works (with my assistance and that of other consultants in the project), and if happy, make the payments.

But for those who insist, and who may want to construct in stages due to availability of funds, and who have the time and are willing to endure the stress and headache of managing a construction project, we always opt to use the ‘Foreman’ way.

The challenges of this option are many. If the foreman is not competent enough, and cannot properly supervise the works by other workers, poor workmanship would always be the result. In addition, there are always attempts to make more money by the foreman and workers. Theft of materials is usually rampant especially if you are not available to personally be there to oversee the works.

Many people would have their relatives, brothers, cousins etc, be available to oversee the works but in most occasions, they would also be sucked into the plots by the workers. Its quite rare to find an honest person these days.

The risk and responsibilities are also transferred to the owner. For instance, if the foreman messes up part of the works, and these need to be redone, the owner always bear the costs for additional materials and labour. If it were a building contractor, they would be forced to repair the works to spec at their own costs.

Its important to understand the pros and cons of both options before deciding which one to take. I would however use a contractor anytime as this also means less supervision on my part as a consultant. I do not end up spending all my time running up and down in sites to ensure works are carried out to spec.