Wolgast Blog

Construction Broker Service Comes up Short in Professional Construction Services

Posted by Cory Sursely on Mon, Nov 28, 2016 @ 10:00 AM

worker-figuring-edt.jpgAs construction broker companies continue to pop up, they’re coming up short compared to a Design/ Build – General Construction (DB-GC) Firm in many important areas for project success.  DB-GCs provide much more control over the schedule and the budget on your project versus a construction services broker.

A DB-GC will typically have their own self-performed trades working on the project site.  Additionally, for us, a full-time, skilled, project supervisor will be onsite 100% of the time for the duration of a project.  Having these company representatives onsite helps set the pace of the work, keeps the jobsite and scheduling organized and as a result incites progress on the project which in turn controls the budget.  With a DB-GC, you’ll also be supported by administrative staff dedicated to keeping record of insurance, invoices, sworn statements, waivers, etc. which are easily tangled if not managed properly and in real time, causing issues with financing and liability.

Additionally, a brokerage company doesn’t have “skin in the game”.  They have very little committed, i.e. no office, no staff, no equipment, and typically no ties to the community.  It’s very easy for them to walk away if things don’t go well.  Some building owners may think that should result in lower fees because the broker doesn’t have the overhead, but they also don’t have much incentive to stick through complications or hold subs accountable to their contracts and warranty work if there’s an issue after the project is done.    

Across the industry, we’re facing a labor shortage.  A broker has to rely on finding an outside contractor for every single trade because they don’t self-perform any work nor have the staff to do so.  Going forward, this shortage could result in additional time to the schedule throughout the industry; however a DB-GC is able to self-perform several trades, so this will more likely help minimize the gaps the shortage could cause with the schedule.  For instance, a DB/GC can begin site work while the other skilled trades are scheduled in the meantime.  Additionally, as the project progresses, the DB-GC can start rough carpentry if other remaining subs are needed to be scheduled.  Again, this will result in better control over the budget and schedule. 

Finally, lower price is the possible competitive benefit a broker can offer, which can make them attractive in the beginning.  In other words, a broker needs to shop around to get the lowest priced services to be competitive in the market.  Therefore, to get to that price point, they may have to select lesser quality subcontractors, which means that the quality of the work may be poorer, the schedule delayed, and warranties difficult to honor within a timely manner.  Often times, brokers are not local to the area and are blindly seeking their outside contractors in a market about which they know very little.  They don’t have relationships or the knowledge of subcontractor work history, which is a risk a building owner faces for the future of their building quality and warranties.

The leverage that a broker has over a full team of outside contractors pales in comparison to a professional DB-GC to maintain quality, protect the building owner, and deliver a project on schedule.  Our industry is going to be facing difficult times until we’re able to beef up the training programs for skilled labor, but by having our own team of craftsmen and subcontractor relationships throughout Michigan and reaching further into the Great Lakes Region, we’re able to deliver the quality and reliable construction services for which we’ve come to be known.

Topics: Design/Build, Professional General Contractor, the Wolgast Way, Scheduling, Good for Business