How to Select a Contractor

How big your project is makes a difference in selecting a contractor. A given contractor might do great work on small projects under $50,000 and have nothing but problems on projects over $100,000. Be sure your contractor has done successful projects of the same size as your project.

The type of construction you are doing is important in selecting a contractor. If you are building a blockhouse, be sure your contractor has plenty of experience in blockhouses, the same with concrete. More recently, a lot of specialty construction materials have been made available for home and commercial construction.

The quality of workmanship you are looking for is important in selecting a contractor. Be very clear on the quality you expect. If you receive a bid that is significantly lower than other bids it could be that you might receive a lower quality job from that contractor. In construction, as in any business, you get what you pay for.

Always Get at Least Three References in Each Category

• Are they happy with the work? • Is the quality what they expected? • Was the contractor easy to deal with? • Did they finish in the allotted time? • Did they leave the areas clean? • Was it clean and safe during construction? • Did they come back fast without complaints for warranty work? • Did they return calls in a timely manner? • Did the contractor handle himself in a business-like manner?

Confirm They Have a License

Does your contractor have adequate insurance? If he does not have workers compensation insurance or it runs out in the middle of your project you could be paying medical and legal bills if a worker is hurt during construction. If the contractor does not have liability insurance you could be making up the difference out of your own pocket.

Check with the Contractors License Board for Complaints

The Contractors License Board keeps records of complaints against contractors. They can tell you if complaints have been filed, how many complaints have been filed, the nature of the complaints (poor workmanship, failure to complete projects on time, if the complaints(s) were resolved. Even the best contractors have complaints.

Unlicensed Contractors

Licensed vs. Unlicensed Contractors There are unlicensed contractors on Guam. You are putting yourself in financial and legal jeopardy if you use an unlicensed contractor. If the contractor fails to perform you may have very few resources against them. If a worker is injured you may have to pay all the medical bills, if the injured workers sues, it will probably be you he sues. Fines up to $10,000.00 can be imposed on both the homeowner and the unlicensed contractor.

Contractors License Board can provide information whether or not a contractor is licensed and what kind of work he is licensed to do, and if any complaints have been filed against them.

Make Sure Everything is in Writing

The contract binds you and the contractor to the project. A written contract protects both you and the contractor. All agreements should be put in writing. It should include everything you have agreed upon and extend of the work to be done.

Get all oral promises and agreements in writing and spell out exactly what the contractor will and will not do. Do not forget it should also spell out what you are responsible for. If your contractor tells you it is not necessary to write your agreements down and keeps telling you he will do it later, you might be headed for trouble. If all your agreements are not in writing you could have a difficult or impossible time in getting what you thought was part of your contract.

Get a copy of the contract immediately after you sign it and keep it in your records. Never sign a blank or partially blank contract. Both you and the contractor are bound by everything written in the contract so read it carefully before you sign it.

Payments

Make sure the payment schedule is based on the work completed. Never let your payments get ahead of the work actually preformed by the contractor. As soon as you make an advance payment to a contractor that will be the last time you see him until he needs more money.

A retaining fee of 10% is normally held until after the project is complete and the owner has accepted occupancy. Sometimes the retaining fee is held for a 60 to 90 day period after the project is accepted.

Change Orders

After the contract has been signed, your contractor or you may offer suggestions that will change your original ideas, or unforeseen items may appear. If you have added work, substituted material or equipment, or changed the completion date, make sure that a clearly worded and signed change order reflects this. The change order becomes a part of your contract and should be attached to it. The change order should: 1. Be in writing. 2. Be signed by both the owner and the contractor before any work is started. 3. Clearly list all changes, increase or decrease in cost, new or different material, any change in completion date.

Warranties

Guam Public Law 21-18, Article 5, Homeowners Warranties, in general protect new homeowners for a period of 18 months from shoddy construction or defects that might appear. This warranty is in addition to any other warranties established by law, equity or by agreement.

Individual items that go into your project may have warranties of their own, such as floor covering, windows, hot water heater, air-conditioning units, etc. Be sure to collect these warranties and keep them with your other important papers. Termite protection is an important warranty and is usually spelled out in the contract. Have it in writing that all material, product or equipment warranties are to be turned over to you before the retaining fee is released.

Keep a Job File

You should keep a file of all papers relating to your project. It should include: 1. The contract and any change orders. 2. Plans and Specifications 3. All bills and invoices 4. Canceled checks 5. Lien releases from your contractor and his subcontractors and material suppliers. 6. Letters, notes of phone calls or conversations and correspondence with anyone, especially your contractor, about your project. 7. Building Permit, Inspection reports, Occupancy permit, Notice of substantial completion, all legal or government documents. It is also a good idea to keep a record of each subcontractor who works on your project, the work performed, and the length of time on the job. When materials suppliers make a delivery, write down the name of the company, the date, and a general description of what they delivered. When you receive lien releases from subcontractors or material suppliers check them against your list. That way you will have record of who has and has not been paid.

Dispute Resolution

The Contractors License Board governs the issuance of licenses to contractors and enforces contractor compliance with the applicable laws of Guam. If a contractor breaks any laws of the Territory of Guam the CLB can impose a fine up to $10,000 and/or suspend or revoke the license.

Avoid Problems

Some warning signs of possible trouble ahead: • The contractor does not have a license • The contractor can not verify his insurance and ability to bond • Contractors do not return calls • You can not verify the name, address and telephone number or credentials of the contractor • You are asked to pay more than 10% of your project in advance • You are asked to pay cash instead of paying by check • You are asked to sign a completion certification for the job by threat, or trick or personal appeal before the job is completed before making any final decision, or if you have a problem, you may wish to consult additional information resources.

Source: Guam Contractors Licensing Board