How to choose the right contractor for your project
Choosing the right contractor is one of the most important decisions in any construction, renovation or refurbishment project. Even when the architectural and specialist works plans are well developed, an inappropriate choice at this stage can result in delays, budget overruns, contractual disputes and poor quality of workmanship.
In Portugal, this issue is even more relevant in a context where the construction sector continues to face challenges such as cost volatility, a shortage of skilled labour and the need for greater rigour in the preparation of contracts.
For this reason, the selection of a contractor should not be based solely on the lowest price. It must be a structured, comparable and technically sound process.
Reasons why selecting a contractor is a critical stage
The contractor will be responsible for turning the approved design into a finished building. Their technical expertise, organisation, experience, team, availability and commitment to meeting deadlines and staying within budget have a direct impact on the final result.
A hasty choice could jeopardise months of design work. Conversely, a well-managed selection process reduces risks, clarifies responsibilities and creates a solid foundation for the construction phase.
At Arboretum Consulting, this stage corresponds to Phase B – Tendering and Market Consultations, where we analyse the construction drawings, prepare the tender for contractors, compare bids and support the client in the decision-making process.
Why is it important to ensure that the project is ready for consultation?
Before consulting contractors, it is essential to ensure that the construction drawings are complete, consistent and sufficiently clear. A contractor can only submit an accurate quotation if they have access to consistent technical information.
This includes drawings, descriptive reports, bills of quantities, technical specifications and all elements relevant to understanding the works.
When the documentation is incomplete, each contractor interprets the project differently. The result is proposals that are difficult to compare, omissions of work and, often, additional costs during the construction phase.
What should be prepared before the consultation?
The tender documentation must include, where applicable, the architectural plans, specialist design drawings, bill of quantities, general conditions of contract, proposed completion date, award criteria and any technical or administrative requirements.
The clearer the information provided, the higher the quality of the tenders received.
Check that the contractor is legally authorised
In Portugal, the construction industry is subject to specific regulations. Before considering any proposal, you should check that the contractor holds the appropriate licence for the type and value of the work.
This check is essential to ensure that the company is formally authorised to carry out the work and that the contract is based on a sound legal foundation.
What do you need to confirm?
You must confirm the company name, tax identification number (NIF/NIPC), the validity or status of the licence, the licence class, and the categories and subcategories applicable to the works. The licence class must be compatible with the estimated value of the contract, and the categories must correspond to the works to be carried out.
Review your experience with similar projects
Not all contractors are the same. A contractor with experience in single-family homes may not be the best choice for a hotel, a renovation in a historic area, or a project with specific technical requirements.
Relevant experience should be assessed on the basis of projects that are similar in scale, complexity, location and type of construction.
Important questions to ask
You should find out what kind of projects the contractor has carried out in recent years, whether they have experience with similar projects, whether they can provide references, whether they have worked with demanding technical teams, and whether they are capable of meeting the required deadline.
More than just a visual portfolio, it is important to understand how the company operates: how it organises the project, how it communicates, how it manages unforeseen issues, and how it responds to changes.
Don’t just compare the final price
The most common mistake when choosing a contractor is to compare only the total cost of the quote. Two quotes with very different prices may not include exactly the same work, materials, quantities or responsibilities.
A lower quote may seem advantageous at first, but it can end up being more expensive during the project if it contains many omissions or unclear terms.
The choice should be based on a comprehensive analysis of price, timeframe, technical quality, payment terms, exclusions, guarantees, the team and their ability to carry out the work.
How can you compare quotes properly?
The comparison should be carried out using a comparative table, in which each tender is analysed by chapter, quantities, unit prices, exclusions and alternatives presented.
This method makes it possible to identify discrepancies, omissions and significant differences, thereby making the decision more objective and transparent.
Assess the clarity of the technical and financial proposal
A good construction contract proposal should be clear, well-organised and technically sound. It should make it possible to understand exactly what is included, what is excluded, the deadlines, the payment terms and the assumptions that have been taken into account.
If a proposal is too general, lacks detail or is based on too many reservations, the risk of conflict during the works increases.
Signs of a well-structured proposal
A sound proposal should include a description of the work, unit prices or clearly defined sections, a completion deadline, a payment schedule, warranty terms, identified exclusions and any duly justified technical alternatives.
A lack of detail at this stage is rarely a good sign.
Please note the deadline
The deadline is just as important as the price. A contractor may quote a competitive price but lack the actual capacity to meet the project schedule.
In a sector where labour availability remains a challenge, it is important to check whether the proposed deadline is realistic. A deadline that is too short may indicate a lack of planning. A deadline that is too long may jeopardise the client’s commercial, financial or personal objectives.
What needs to be reviewed in the schedule
The schedule should identify the main phases of the project, interdependencies between tasks, critical dates, material delivery periods and the team’s mobilisation capacity.
It should also allow for realistic margins for approvals, deliveries, weather conditions and technical contingencies.
Confirm communication and management skills
The relationship with the contractor does not end once the contract has been awarded. On the contrary, it is on site that communication becomes most important.
A good contractor must be able to communicate clearly, answer questions, attend meetings, provide technical information when necessary, and work closely with the site supervision team and the project team.
The importance of transparency
Transparency in communication reduces conflicts. During a construction project, technical decisions, adjustments and unforeseen issues inevitably arise. When there is a well-structured professional relationship, these issues are resolved more quickly and with less impact on costs and deadlines.
Assess warranties, insurance and liabilities
Before proceeding with the award of the contract, it is essential to confirm the guarantees offered, the relevant insurance cover and the liabilities assumed by the contractor.
The contract must set out the obligations, deadlines, penalties, payment terms, change management, works guarantees and approval procedures.
Why a contract is essential
A well-drafted contract protects both parties. For the client, it provides greater certainty regarding what has been agreed. For the contractor, it clearly defines the scope of the work and the conditions under which it is to be carried out.
Without a clear contract, any disputes that arise on site become more difficult to resolve.
Consider value engineering before making a final decision
Value engineering enables the analysis of technical alternatives that can improve the balance between quality, cost and time. It is not simply a matter of ‘cutting costs’, but of finding more efficient solutions without compromising the project’s performance.
This approach can be particularly useful when the tenders received exceed the projected budget or when there are technical solutions that can be optimised.
When does it make sense to apply value engineering?
It makes sense to apply value engineering during the negotiation phase, before the contract is signed, to refine materials, systems, construction methods or technical solutions, always with the approval of the project team.
Make your decision based on objective criteria
The choice of contractor should be an informed decision. Ideally, it should be the result of a structured technical and financial analysis, in which all criteria are clearly defined.
Price is important, but it must be assessed alongside the quality of the tender, the company’s experience, technical capability, timeframe, availability, guarantees and compatibility with the project.
A sound decision at this stage reduces risks in the next phase: construction.
A quick checklist for choosing the right contractor
Before awarding the contract, please check that:
- The construction drawings are complete and have been checked for consistency;
- The contractor holds the appropriate licence or certificate;
- The tender is detailed and comparable;
- The price includes all necessary works;
- The timeframe is realistic and supported by a schedule;
- There are references to similar projects;
- Exclusions are clearly identified;
- Guarantees and insurance are defined;
- The contract clarifies responsibilities, payments and changes;
- The decision is not based solely on the lowest price.
How Arboretum Consulting can help
In Phase B – Tendering and Market Consultations, Arboretum Consulting supports the client throughout this process: from the analysis and validation of the construction design through to the preparation of the tender, consultation with contractors, analysis of bids and decision support.
Our role is to ensure that the client compares bids based on clear technical and economic criteria, avoiding omissions, reducing risks and ensuring the best balance between quality, cost and timeframe.
Choosing the right contractor is a strategic decision. With structured and independent management, this decision becomes more secure, transparent and aligned with the project’s objectives.