Is construction experience required to be a GC?

[HVACTexas]

We are having quite a debate here in TX as to whether or not home builders should be licensed. If so what should the experience requirements be, if any? One person said he was his own GC and didn't have any experience but relied on his subs. My thinking is it takes quite a practiced skill to organize all the trades so they don't get in each others way or do something out of order.

So should a licensed builder have experience or not?

[giddonah]

I don't like requirements. They end up creating old boy networks. I will agree that sometimes things can degrade to the point where people get fed up and want the government to step in, but in the end that usually ends badly with bloated, inefficient, stupid agencies that get in the way more than help things. New York doesn't require state licenses for GC's. Orange County doesn't require them either and the county is a mess with GC's, but it drives up the costs in other counties that do require them.

This is why there is a debate. There are good arguments for both pro and con.

[Rich]

Requirements also help level the playing field - which I'm all for. I've seen too many homeowners waste money because they hire an unqualified builder. Seen way too often in a small population of Montana even - all they require there is proof of work comp and $70.

[Allan]

HVAC:

I build new homes in Houston (for 30 years), I build in the 3-4 homes per year in the 2-3 million$ range. I know 3 custom builders like myself, much more successful than me, building 5-10 homes a year each in the 3-8 million$ range. One is a woman. None of them have any construction experience. I believe one used to be a banker, one was a realtor. Other than some framing I did summers in high school in the mid 60’s, I had no experience.

I have known and observed a lot of home builders in my time. The most successful, from a business standpoint, are those that are good in business. I’ve seen a lot of carpenter types who new a lot about construction but couldn’t handle the business end, and eventually fail.

Knowledge of construction never hurts, obviously it’s helpful. But it is not an absolute requirement.

[Dan J]

Hmmmm.... Who are you concerned about here? The owner that hires the GC in good faith to provide a product that meets certain standards, will provide an accurate estimate of the cost, complete the work within the amount of time that has been promised?

Is your concern for the supplier or subcontractor that relies upon the GC to manage the project’s schedule, coordination, safety, quality, and financing?

Or, is it the GC that you’re concerned about protecting?

I’d hope you would want a qualified / certified/ verified professional to handle your dental work, medical needs, financial investments, piloting of the aircraft on your next trip, teaching your children, designing the bridge you drive across.... You get the idea?

How much do you value the contractor’s role in a job? I’d hope that there would be some sort of standard required of any professional, and that would include a builder/GC.

Just my humble opinion,
Dan

[Rich]

Hallelujah Dan J.
Allan: with that criteria then any business oriented homeowner shoudl be able to build their own home. I disagree with that on many levels.
Yes - some are definately able to do it.

[Dan J]

Hey Rich,

I’m not against anyone being in the “business” of construction. And Allan, the more business oriented folks we can bring into the industry, the better. The problem I see is that there are many people that are harmed by general contractor’s “ignorance” and the mistakes usually end up falling upon the subcontractors’ or owners’ footsteps.

It truly takes business and trade experience to make a good GC... notice I didn’t say “successful” but I did say “good” GC. I know many contractors who have made plenty of money without knowing how to manage the entire construction process correctly. Anyone that’s been doing this for very long will tell you how important it is to have good subcontractors. But too many jobs are run by the subcontractors, and not by the GC. Usually, someone is being hurt when this happens.

Dan J

[Allan]

Rich:

My assessment is the result of 40 years around this business, 30 years in this business, and 25 years of being a real student of the home building industry. As far as “any business oriented homeowner being able to build their own home”, many could, but that’s not what I said. I said the most important quality in being a homebuilder is your business skills, not your construction experience.

[Allan]

Dan:

It takes a lot of attributes to be a successful homebuilder. Is a good homebuilder someone who builds a “good house” or someone who is profitable? I don’t think the two are mutually exclusive, by the way. I build a hell of high quality home, but my first goal is to make a profit. If I don’t make a profit, I will not stay in business.

[Dan J]

Allan, you're correct in saying that being a "good builder" and being "able to build a good house" are not mutually exclusive. My point exactly, you must be capable of doing both in order to be a true professional (that is, of course, my humble opinion). You can easily separate your company's marketing and jobsite safety programs, or your estimating and quality control systems, into distinct areas of expertise. But what if you are deficient in one of these or some other areas? Are these deficiencies not causing "failures" within your business? But of course, you can still be "financially successful" if you push the business hard enough.

I'm not ragging on you, because I'm certain that you run a good business or you wouldn't have lasted as long as you have. I'm simply trying to make a statement that there are benefits to having "certifications" and standards for companies to meet in order to be considered a GC. A company's credit worthiness is as important as having the ability to properly supervise work in a safe manner...

Dan J

[Rich]

Rich:

My assessment is the result of 40 years around this business, 30 years in this business, and 25 years of being a real student of the home building industry. As far as “any business oriented homeowner being able to build their own home”, many could, but that’s not what I said. I said the most important quality in being a homebuilder is your business skills, not your construction experience.

I'm not trying to insult your years of experience Allan.. but IMO it's just a great disservice to all involved to not know how to construct what you've been contracted to do. Who do the subcontractors ask questions of? Who answers any questions? Do you say "I dont know - go ask so and so"? Who does the schedule? Do you subcontract that too?
I think it's just as important to know how to build.. sure being business savvy is important to make money but if every building you construct fails then the business sense won't do any good at all.

[giddonah]

This is a perfect thread for TeamContractor.

I would like to point out that currently there is no established body of knowledge for a GC like there is for a dentist, accountant or whatever profession. Until that happens, and on a nationwide scale, I'm against individual counties and states making up their own rules. In one city in Orange County you have to be licensed to do electrical or plumbing. Makes sense, right? Except it has gotten to the point where a plumber with 30 years of experience running an entire university can't get licensed because the city won't accept that as a substitute for an apprenticeship. Come the hell on now, this guy has to work under some schmuck for two years? Rediculous. This is how I see things getting out of hand. This sort of thing doesn't happen in other professions, only construction trades.

[Cole]

This is a perfect thread for TeamContractor.


Took the words out of my mouth.

Take over to the other site guys.

www.teamcontractor.com

[HVACTexas]

Wow! What a great discussion. I would like to hear some examples of jobs gone bad due to the GCs inexperience.

1. I was called to install a duct system in a two story house where the "Homeowner/GC" had the carpenter install solid 2x12 ceiling joists (between the two stories). Typically web trusses are used here to provide a way to snake the ductwork between the floors. GC insisted that I install the ductwork anyway. I refused because I knew he wouldn't be happy with the result. He then wanted me to "knotch" the 2x12s to get the duct through. The only way I would have even considered this was to use spacepak duct system but even then I didn't think it was right to compromise the structure just to run some ducts. He said fine I will get the carpenter to cut the knotches. Carpenter said no way Jackson, ain't doin it.

GC ended up removing the solid joists and going back with web trusses. Luckily for him the second story hadn't been framed yet.

Conclusion: Myself and the carpenter saved this novice builder's butt by refusing to do it his way. But as a sub I am telling you sometimes we aren't willing to take a stand and risk getting fired. We just go ahead and do what is asked of us to get that paycheck. None of us should be put it this position IMO.

[rabadger]

I just scanned this thread quickly, It sounds like the same old same old. Not enough planning and communication before the hole was started.

[Allan]

Dan:


No state that I know of has any type of certification or licensing for builders or GC’s that’s really got any teeth in it. I think there is a reason for that, lawmakers want businesses as unregulated as possible. We discuss this all of time over at the JLC forum, and another person said it better I can:

“Another reason it's (licensing) wrong is because it is antithetical to the ideals of a free society. There is no separating economic liberty from personal liberty; the two walk hand in hand with each other. Private property, free markets and the right to contract are the main elements of economic liberty. When we allow the state to decide who can do business with whom we take yet another step towards socialism. And that is a bad thing.”

That's about as fine of a way of explaining free commerce in a free society as I've ever read.


Rich:

Maybe because it’s because I’ve built for so long or built so many houses, but I really don’t think the actual constructing of a house is that difficult. I think it can be learned pretty easily. Also, you can hire a pretty good PM for $75K per year who can build for you. Good plans, an engineer to inspect foundation/frame, qualified HVAC-Plumber-Electrician, good subs, you can get a house built.

Homebuilding (and construction in general) is built on a three legged foundation:

(1) construction skills
(2) marketing skills
(3) general business skills.

Of the three, construction is the easiest to learn, the other two are the most important. If you are good in all three areas, you will be successful.

[Rich]

Maybe because it’s because I’ve built for so long or built so many houses
haha.. It sounds to me like your pretty self-important if nothing else.

The quote you've got there might work in a perfect world.. until somebodys house falls down and kills somebody. Then all of a sudden everybody is asking - "Why don't we have something that can regulate these contractors from hurting anybody else" It's not a free society we live in it's a democratic society. The loudest group of the most people rules.
IMO regulations of the construction industry - including OSHA, building departments, licenses keep the less desirable contractors out of the market - which keeps it competitive instead of a free-for-all the contractors that are just out for a quick buck - not caring who gets hurt or loses money.

[Allan]

Basic rules regarding safety, building codes, insurance, etc are fine, but extreme licensing requirements, which for the most part don’t exist anywhere, are not the answer.

I stand by my position, based on my own experience and observing other builders for many years, one’s overall business skills are the most important factor in running a construction company.

[Rich]

I don't disagree with you on the point of extreme licensing - but I think there does need to be some licensing if that's only a minimum of registering with the state.
In regards to business skills - yes it is probably the most important aspect for the continued health of the company - but my concern is for the owners/clients/subcontractors, etc.. The company may make hand over fist - but if every client is upset at the end of the project because the builder doesn't know how to schedule the work or know if the mechanical guy is putting the system in right - then it won't take long for the company to see a shift in profits.

[jproffer]

Of all the theories I've read, registering with the state makes the most sense to me, and here's why:

Say we have 2 "wannabe" construction companies, company A's owner is skilled in business, building, has a knowledge of all sub trades, good communication skills, etc. Company B's owner simply woke up one day and said "I think I'll build houses, sure I know nothing about business or building, but how hard can it be, it's just a house"

Now, also, let's say that in their state, someone wanting to do business as a GC is required to register with the state's professional regulatory dept., naturally the state isn't going to impliment this program for free, so there's a fee involved, let's make it a pretty high one just for arguments sake, outragously high in fact. Let's say $5000 (I know that's crazy).

Now owner A is thinking, "Ok, $5000, I can do that, I'm confident enough in my skill and knowledge to invest $5000" and he does, and where his business and success go from there is really irrelevant.

Owner B is now looking at this a little closer. "I know nothing of this business and no skill of my own to speak of. Am I really willing to invest $5000 on a hope and a prayer?...."

I think most of us can answer that one, almost invariably the answer would be "NO...I'm not willing to do that at all"

Almost self regulation, obviously there will be some hacks that think they can do it and are stupid enough to pay 5 grand to find out, but as of now there is NO regulation.....so which is better?

Now the trick would be to get the state to stop their interest in it right there. Take the registration fee, and then BUTT OUT.

Just MHO

[Allan]

"I think I'll build houses, sure I know nothing about business or building, but how hard can it be, it's just a house"

That was pretty much my attitude in 1975! Since I only had $5,000 when I started my company, a $5,000 registration fee would have left me out. Homebuilding is a very tough business, most don't survive over the long haul, the market has a way of weeding out the bad builders.

Allan

[jproffer]

"the market has a way of weeding out the bad builders."

I agree, but at whose expense? How many botched jobs will these hacks get done before they give up? How many hard earned homeowner dollars will be wasted on poor workmanship and sometimes downright dangerous building practice?

"That was pretty much my attitude in 1975"

Congratulations on making it! Sincerely. you must have been lucky enough to hire good, honest, knowledgable help in the early days, and you must do good work because, as we agree on, the market would have "weeded YOU out" by now if you don't.

[Allan]

Proffer:

The less regulation of any industry or profession, the cheaper those goods and services are. That’s just a fact of economics. There will always be abuses, there will always be consumers looking for such cheap prices, someone will satisfy that demand, usually with inferior work. But the overall net benefit is positive in a free market system.

As far as me surviving in this industry, I attribute it to hard work, perseverance, and the NAHB, not luck.

Allan

[woodall83]

I just hope someone will give me a chance :)