Editor's Note: This is the eleventh in our 2008 series of "Get Your Business to Work," written by our regular columnist George Hedley.
This article is dedicated to Brooks Williams, owner and president of Brooks Corporation General Contractors of Las Vegas, NV, who died in a private plane crash with his wife on September 18, 2008.
When I wanted to start developing commercial projects in Las Vegas, NV, a few years ago, I began the search for real estate brokers, architects, engineers and general contractors located in the Las Vegas area. My goal was to build a team of professionals who could take charge and handle our projects without problems or issues.
I called everyone I knew who was doing or had done business in Las Vegas. My local Orange County, CA, real estate broker had an office in Las Vegas and connected me with their top broker there. Our banker referred me to a developer who then referred me to an architect, and the architect referred me to a small contractor to consider.
The Selection Process for Choosing the Right Contractor
Construction is the biggest part of any development project. And since I have been a general contractor for over thirty years in southern California, it was important that I didn't make a mistake and select the wrong contractor for our Las Vegas projects. We planned to build two or three ground-up new construction projects between $5 million and $10 million each. So I took our architect's contractor recommendation and also looked for additional general contractors to interview who specialized in office and industrial business parks. After a few weeks, I had a list of ten repuatable quality construction companies to contact.
I called the president or owner of each company to set up meetings at their offices and start the selection process. Some of them were slow to respond. Others I had to call several times to get a return call. And some forwarded me to their marketing director or had their secretary screen their calls. Wow, I was looking to hire a general contractor for three projects in excess of $20 million of work, and it was almost impossible to meet with many of these company principles. Some of these construction companies were very active in the marketplace, advertised in the local business journal, sponsored charity and industry events and had a major marketing presence in Las Vegas. But they didn't know how to return a call to a potential customer.
After I eliminated the "too hard to reach" companies, I arranged meetings with five contractors to get the ball rolling. I planned to fly to Las Vegas and meet with each company for a few hours over a two-day period to get to know the companies, walk around their offices to feel the vibe and energy, explain our projects, see if they were really interested, meet their team and then give them time to prepare their proposals. I had an agenda for the meetings and then gave them preliminary plans and a scope of work for our first project.
I asked them to prepare a preliminary cost estimate and present a formal proposal to include their: contractor fee, general conditions cost, timeline and schedule to build the project, detailed scope of pre-construction and construction services, reference list, resumes of their proposed project team members and a list of their current and past projects.
Since I planned to visit the jobsite only twice a month, I told them I wanted to hire a general contractor to manage the project from pre-construction design and planning to completion. I wanted the contractor to assist the architect and engineers with designing the right project with the right quality of materials for the project type, industry standards and marketplace demands. I also expected them to coordinate the required permits, tests, utilities, etc., needed for approval.
One of the most important criteria for me in selecting a contractor is their ability to create an accurate budget. I asked the contractors to develop a preliminary cost estimate of what they thought the project would actually cost to complete, including everything required by the city, utility companies, architect and engineers when finished-no unknowns. Developers only get one chance to ask the bank for a loan amount. There is no extra money to cover mistakes in the plans, changes caused by missing details or unforseen site conditions. They were the experts, and I wanted them to convince me they knew their costs.
After I left the first meetings with these five contractors, I was almost convinced who I was going to select. Two of them had nice offices, professional project managers and estimators and presented themselves incredibly well, while the other two weren't very professional, were a little unsure of their costs and had track records that didn't include much of the product type I was developing.
The last contractor I interviewed wore blue jeans, drove a pickup truck, acted a bit gruff, and we had to meet at the architect's office becaused the contractor worked mainly out of his house. He had a very small company consisting of himself, an office manager and two field superintendents. In fact, two of the other contractors I interviewed had warned me he was not a good choice and asked why he was even being considered.
After these initial meetings, I asked to receive their proposals and cost estimates three weeks later. I planned to review their proposals and estimates and then set up second meetings to review their specifics, inclusions and project plans in person. I received three proposal packages on time and two others a week later.
Of the two contractors who made the best first impression, only one of them sent a complete proposal. The smaller contractor actually had everything I had asked for and more. He included his financial statement, photos and addresses of every project he had built and an excellent reference list with letters of reccomendation from past clients including many I recognized.
When I reviewed the cost estimates, it was apparent most contractors don't really know their costs. Based on our past ten similar projects, I had estimated the 50,000-square-foot project to cost $5 million or $100 per square foot. The five contractor budgets varied from $5.1 million to $6 million-as much as 18 percent or $18 per square foot difference!
Most developers mark up their project costs by 15 percent to determine the selling cost. The contractor's cost variances were more than the overall potential project profit-not good. This was way too much variance for equal contractors who compete with each other in the marketplace everyday. Something was wrong.
This changed my opinion of the contractors I was considering. The one I thought I wanted to hire upon first impression presented the highest cost. The two contractors who were the closest to my cost budget were the least impressionable in the first meetings. Now what? I looked at every proposal and compared their fees, general conditions costs, schedules and scope of services. Most of them were very close in every category, and their contractor fees didn't vary more than a percentage point. So, on to the interviews.
In each interview, I focused first on how each contractor arrived at his preliminary cost estimates. The three highest cost contractors had called in their favorite subcontractors for every trade and asked them for budget prices. Then, they added them up, put their fees on top and turned them in. Contractors who use this method don't know what things really cost, don't have enough time to do a good job or don't have experienced estimators.
This type of estimate does not provide the customer the benefit of the general contractor's knowledge or experience. To me, this is a disservice to their customers and a waste of my time. It reveals that these contractors don't really care about price as much as getting their markup. They hope to get awarded projects based on their smile and presentation skills.
The two lower cost contractors had gotten some subcontractor input, plus they had looked at what other similar jobs had cost in the past. They balanced their preliminary and conservative subcontractor bids with the reality of the marketplace and my request for a real cost to make my overall pro-forma budget work for the project in order to move forward. At 18 percent over budget, I couldn't get a loan and build the project. These two contractors presented their best estimate of what the job would cost, including everything needed to complete the entire project.
The decision was tough-a large company with a staff of fifty or a small contractor who only had a few employees. As a hands-on principal in my own construction and development company, I went with my gut and selected the smaller contractor. I felt I would get his personal attention. We would be a big fish in his small pond. I then had to convince my partners, investors and lender that he was the right choice. My confidence in his ability to do the right thing, bring the project in on budget, finish on time and build with quality workmanship sold the deal. Plus, he was the only contractor who actually presented a complete on-time proposal with accurate costs.
Brooks Williams: The Right Man for the Job
Fast forward two years later. I definitely selected the right contractor, and more importantly, I selected the right man. Over the next few years, I discovered Brooks was a contractor's contractor. He wasn't afraid of being himself-no fancy car or suit, no flash, no big expensive PowerPoint presentation to convince me to hire his company. He was just Brooks-a real person with real costs, real commitments and nothing more than his word. He was a "get it done" guy who did what he said he would do.
The projects Brooks built for us came in exactly as promised. He actually returned us significant cost savings after completion. He hired the right subcontractors for the job and didn't let them get to us. He managed all the required details without any complaint. When we asked him to do some extra work, he only charged what was fair without an argument or attempt to get a little more. His field supervisor was an experienced take-charge professional managed and trained by Brooks.
He focused on quality and safety and wouldn't let the subcontractors get away with anything. He handled the inspectors and made it happen. He averted problems by staying out in front of pending issues. The project was always clean, safe, organized and in control. Why? Brooks was on top of it all the time. Brooks didn't overcommit. He only did what he could handle in an excellent manner.
Brooks also handled all of the project paperwork and accounting himself. He reviewed every subcontractor bid to ensure the scope was what was expected. He wrote tight subcontracts. He approved and paid every bill exactly per the contracts. His invoices were on time and accurate with all of the paperwork in order. He never had a prolem with money, payments or getting paid on his jobs. If he told you he would pay, he did.
Brooks was a team player. He would sit in meetings with engineers and ask them why they had overdesigned some part of the project. In the middle of the meeting, he would call a subcontractor and ask if something was really needed or if there was a better way to build it. He didn't let anything slip by his scrutiny. He had the success of his customer and the final project in his best interest.
When asked, Brooks would go beyond his construction contract requirements. As our project neared completion, Brooks made sure the doors were unlocked for the real estate brokers to show the property late in the afternoon and then locked for the night. When we wanted to hold an open house, he made sure the property was perfect and ready to shine for prospective tenants.
In a word, Brooks had integrity. He would take instant action to solve a problem and always made sure he was doing what was right. Brooks was bold. He had taken a risk in leaving his executive job with a large general contractor and starting his own company with the attitude that there was a better way to build a company and take care of customers. He valued his ability to get things done the right way the first time versus using the typical tactics, promises, flash or slick marketing that saturate the "Vegas" atmosphere in which he operated.
And through the tough environment of construction and the quiet storm of his personality, Brooks would invite his business associates and customers to the best steak restaurant in town to host thank-you dinners to show his appreciation for the opportunity to have us as his customers. Brooks was a real giver who served on the board of directors of the AGC and on several other committees to make his industry better. And most importantly, he put his family first and took lots of weekend trips with them to their Colorado mountain home.
Brooks Williams will be missed by me and everyone who knew him. While he may have initially looked like a cowboy, once you got to know him, he was professional, thoughtful, smart, detailed, strong and steady like a rock. He will be impossible to replace. I will never meet another Brooks Williams in my life. But I will always remember his personality, confidence, style, mannerisms, work ethic, dedication, honesty and integrity. He was proud of what he did, what he could do and what he wanted to do.
I am proud to have known him. May he and his wife rest in peace. My prayers are with their children and family. May we all learn from Brooks how to be a real man, a real person, run a real business and do real things. He is unfortunately gone but never forgotten.
Construction Business Owner, November 2008
