How to Choose a Construction Contractor: A Developer's Checklist

The tender is not the most important part of contractor selection. By the time you receive prices, the critical filters — financial capacity, technical competence, cultural fit — should already have been applied. Most tender disasters begin with a procurement process that asked the wrong questions at the start.

Financial Capacity

The contractor must have the financial resources to carry your project through the payment cycle. Request the last three years of audited accounts. Look for: a current ratio above 1.2 (current assets to current liabilities), consistent turnover relative to your project size (project should not represent more than 25–30% of annual turnover), and no significant outstanding judgments or insolvency actions.

Technical Competence

Request examples of three to five completed projects of similar type, scale, and complexity to yours. Ask specifically: Did they deliver on programme? Within budget? To the specification? Do not accept references without speaking to the client contact directly. Ask the reference: Would you appoint them again? Their answer — and their hesitation — is more informative than any written testimonial.

What Not to Over-Weight

Price is the most common selection criterion and the most frequently regretted. An abnormally low tender is not a saving — it is a risk transfer. The contractor who prices below market is either planning to claim their way back to margin, managing a poor supply chain, or simply unable to build the project for the price submitted. Sustainable procurement means selecting a contractor who can deliver the project for the price they submitted.

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The cheapest tender is rarely the cheapest project. In twenty-five years, I have never seen a developer regret spending 3% more to appoint the right contractor.

The Checklist

• Audited accounts for last 3 years — review current ratio and turnover
• Three comparable project references — speak to each client directly
• Current insurance certificates (employer's liability, public liability, professional indemnity)
• Key personnel CVs — who will actually run your project day to day
• Health and safety statistics — RIDDOR, LTI frequency rate, last three years
• Confirm subcontractor prequalification process — how do they manage their supply chain?