Key Takeaways
- GC justified above $50K; self-manage saves 15-25% below.
- Eight vetting criteria prevent most management problems.
- Fixed-price preferred for defined scopes; cost-plus for uncertain.
- A reliable contractor network is a major competitive advantage.
Review of the contractor management operating model from Track 1.
Process Flow
Operating Model Recap
GC vs. self-manage breaks even around $50K. Eight vetting criteria screen contractors. Three contract types allocate risk differently. Draw schedules protect capital. Networks take 1-2 years to build but are among the most valuable investor assets.
Key Takeaways
- ✓GC justified above $50K; self-manage saves 15-25% below.
- ✓Eight vetting criteria prevent most management problems.
- ✓Fixed-price preferred for defined scopes; cost-plus for uncertain.
- ✓A reliable contractor network is a major competitive advantage.
Sources
- NASCLA — State Licensing Requirements(2025-01-15)
- NAHB Cost of Doing Business Survey(2025-01-15)
- BLS Job Openings and Labor Turnover Survey (JOLTS)(2025-01-15)
Common Mistakes to Avoid
Treating contractor management as informal rather than systematic
Consequence: Inconsistent vetting, missing contract protections, and payment disputes that could have been prevented
Correction: Follow the five-phase lifecycle (Sourcing, Vetting, Contracting, Managing, Evaluating) with documented processes at each stage
Not maintaining a contractor database with performance history
Consequence: Repeating the full vetting process for every project instead of leveraging past experience
Correction: Maintain a database with contact info, vetting documents, project history, performance scores, and notes for each contractor relationship
Test Your Knowledge
1.Typical GC overhead and profit?
2.Which contract type places most risk on contractor?
3.#1 contractor retention factor?