by George Hedley
This article is dedicated to Brooks Williams, owner and President of Brooks Corporation General Contractors of Las Vegas, Nevada who died in a tragic private plane crash with his wife on September 18, 2008.
When we wanted to start developing commercial projects in Las Vegas 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, California real estate broker had an office in Las Vegas and set me up with their top broker in Las Vegas. Our banker referred me to a developer who referred me to an architect. The architect referred me to a small contractor to consider.
Construction is the biggest part of any development project. And since I have been a general contractor for over 30 years in Southern California, it was important I not make a mistake and select the wrong contractor for our Las Vegas projects. We were planning to build two or three ground up new construction projects between $5,000,000 and $10,000,000 each. So I took our architect's reccomendation plus started looking 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. Some of them put me off to their marketing director or had their secretary screen their calls. It sometimes felt like getting through Fort Knox to talk to the man! Wow, I was looking to hire a general contractor for three projects in excess of $20,000,000 of work and it was next to 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 get to" companies, I arranged to meet with five contractors to get the ball rolling. I planned to fly to Las Vegas, and meet with each company for a few hours each over a two day period. In our meetings I wanted to get to know their 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, and list of their current and past projects.
Since my office was in California and planned to visit the jobsite only twioce a month, I told them I wanted to hire a full-charge general contractor to manage out project from pre-construction design and planning, to completion, and move-in. I wanted to hire a contractor who could assist the architect and engineers design 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, fire department, post office, and all the other agencies who needed approvals.
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. Two of the choices were not very professional, were a little unsure of their costs, and their track records did not include a lot of the product type I was developing. The last contractor I interviewed was dressed in blue jeans, drove a pickup truck, was a bit gruff, and we had to meet at the architect's office becaused he worked mainly out of his house. He was a very small company with only 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, we scheduled to get all of their proposals and cost estimates three weeks later. I asked them to send them to me first. I would review their proposals and estimates and then setup second meetings to review their specifics inclusions and project plans in person. I received three proposal packages on time and two a week later. Of the two contractors who made the best first impression, only one of them sent a complete proposal. The smaller contractor 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 review 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 would cost $5,000,000 or $100.00 per square foot. The five contractor budgets varied from $5,100,000 and $5,200,000 to $6,000,000. As much as 18% or $18.00 per square foot difference! Most developers markup their project costs by 15% to determine the selling cost. The contractor's cost variances were more than the overall potential project profit. Not good. Way too much variance for equal contractors who compete with each other in the marketplace everyday. Something was wrong.
This shook up 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 they arrived at their preliminary cost estimates. The three highest cost contractors had called in their favorite subcontractors for every trade and asked them for budget prices. They then added them up, put their fees on top, and turned them in. This method is what contractors use who don't know what things really cost, or don't have enough time to do a jood job, or don't have experienced estimators. This type of estimate does not proivide the customer the benefit of the general contractor's knowledge or experience. To me, this is a disservice to their customers and is a waste of my time. It shows these contractors don't really care what the price is, just that they get their markup. These 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 the fact I needed a real cost to make my overall pro-forma budget work for the project in order to move forward. At 18% over budget, while safe, 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.
All else being equal, I had to pick a horse to build our 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 and we would be a big fish in his small pond. I then had to convince my partners, investors, and lender 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.
Fast forward two years later. I definitely selected the right contractor and more importantly I selected the right man. Thanks to our fantastic architect, Gary Congdon of Lee & Sakahara Architects for reccomending Brooks Williams of Brooks Corporation General Contractors to build our three projects in the Las Vegas area. Over the next few years, I discovered Brooks was a contractor's contractor. He wasn't afraid of being who he was. No fancy car or suit. No flash. No big expensive power point presentation to convince me to hire his company. Just Brooks the real person. With real costs and real commitments. Nothing more than his word. 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 little details required without a complaint. When he said he would do something, he did it. When we asked him to do some extra work, he only charged us 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 insure 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. Never 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. Right in the middle of the meeting he would call a subcontractor and ask if something was really needed or for a better way to build something. He didn't let anything slip by his scrutiny. He really 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 the project was nearing completion, his would make 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 action instantly to solve a problem. He always made sure he was doing what was right. Brooks was bold. He took a risk and left his executive job with a large general contractor and started his own company with the attitude there is a better way to build a company and take care of your customers. He valued his ability to get things done the right way the first time versus tactics, promises, flash, or slick marketing that reak of the 'Vegas' atmosphere he operated in. He was a breath of fresh air in a City filled with get rich quick artists and broken dreams. 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 and was on the board of directors of the AGC and served on several committees to make his industry better. And most importantly, he put his family first and took lots of weekend trips with them to Colorado to his 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, considerate, caring, smart, detailed, strong, and steady like a rock. He will be impossible to replicate or replace. I will never meet another Brooks Williams in my life. But I will always remember his traits, personality, confidence, style, mannerisms, work ethic, dedication, honesty, and integrity. He was proud of what he did, could do, and wanted to do. I am proud to have know 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, be a real person, run a real business, and do real things. He is unfortunately gone but never forgotten.
Best-selling author and professional speaker George Hedley helps entrepreneurs and business owners build companies that work. He is the author of "Get Your Business To Work" and the "The Business Success Blueprint Series" available on his website at www.hardhatpresentations.com. His proven system to earn more, work less, build profits, lead people, and generate customers has helped hundreds of businesses in multiple industries. Company owners are invited to attend his 2-day 'Profit-Builder Circle' boot camps. To receive a free newsletter, free profit report, or to hire George to speak at your next event, email: email@example.com or call 800-851-8553.
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George Hedley owns a $75 million construction and development company and
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