Ensuring Quality: Navigating Contractor Selection and Avoiding Labor Brokers.
Learn effective methods for selecting quality contractors and avoiding labor brokers in home construction. Manage home repair and reconstruction projects efficiently, ensuring skilled trades and maintaining oversight for high-quality results.
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By Murray Wennerlund published 4-21-2014 updated 11-18-2024
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When you ask a contractor or tradesman a question, you would expect a truthful and sincere answer. So why does it feel like homeowners have to bring out the 500-watt light bulb and use interrogation tactics to get to the details and scope of work?

Since 2015, I have been trying different methods of screening construction trades that are needed to build a home.

The state simply says to look for a licensed contractor and ask them for an estimate. That's not as easy as it sounds. When you start trying to filter through thousands of licensed contractors that aren't actually residential home builders but rather a variety of contractors, you get the impression that your state doesn't know how to do the simple task of matching a contractor with a task and then with a customer.

In three years, after filtering 465 companies out of over 4,000, the question remained, "Are you a contractor with experience in the field your license covers?"

Every licensed contractor answered "Yes." But after a little more research and study, I found that most labor-only contractors were actually labor brokers who collected workers to do jobs and didn't have the skillset to determine if the laborers were actually knowledgeable.

For example, a concrete contractor "A" was awarded the job. The concrete contractor awarded the job called several other concrete companies to find who might be available. Company "A" then hired company "B," who ended up on the job site and started the work. The following day, company "B" was replaced by company "C" because Company "A" could only hire company "B" for one day. After the third day, Company "A" was sending one or two different workers every day. Finally, the job was completed, and you noticed that it was three different groups of people, but no one from Company "A" actually did the work. This is called a labor broker arrangement and often involves other unskilled labor, resulting in inconsistent quality.

People have tried to keep up with the different workers arriving daily by taking pictures of the different trucks, licenses, faces, etc. It's impossible to manage a project when you have different groups of people on different days.

Classical "Labor Broker" is similar to a temporary employment agency. The labor broker hires workers and then sells their services as employees to other employers that need the particular skill set.

Typical "Labor Broker" in construction is set up the same way as the classical labor broker but with some minor changes. The labor broker doesn't hire the workers as employees but rather hires them as a contractor group or independent contractors, not requesting business licenses, trade licenses, tax information, or proof of insurance. They are simply a group of laborers who have worked together doing specific tasks and are known privately within select labor broker communities.

Because the main contractor who hires sub-contractors that are groups of labor workers is not actually formed into a business entity, it's easy for the main contractor to say it was the sub-contractors' work, not the main contractor's work, that you are questioning. The issue becomes a civil lawsuit fast when you work with labor brokers. The independent contractors will be nearly impossible to trace if something is wrong with your construction, and the main contractor will simply say it was another sub-contractor and they were not responsible for checking licenses, skills, insurance, etc.

Do you see how easy it is for labor brokers to take jobs and money from homeowner builders and deliver a random product, mostly of low quality? You'll hear them talk about how fast the crews are, and you'll find, like many others, that speed often sacrifices quality.

If you are building your own home, don't fall victim to low standards and unskilled labor.

The only way you can protect yourself is to pay for the job's labor as you progress and after a couple of inspections for quality. Never let your labor broker purchase materials for you. Most times their construction discount isn't worth them having the right to order material that you cannot physically account for.

So here's the plan: hire inspectors, and hire a person to monitor the workers and determine their skill levels as they work. You'll be surprised how many carpenters they say they send you and how many don't own hammers. Or the concrete workers that can't mix grout. The only way to spot unskilled labor is to have someone watching and providing oversight on your behalf.

I have recommended video cameras for many reasons, and I use them to watch my blind sides of the build. When I notice a worker not providing the skills for the task they have been assigned, I snap a picture and send it to the owners. Then the owners can ask the main contractor to replace the person and, if needed, have the task reworked so it's correct. You will find many unskilled workers will have someone attempt to cover over the mistakes.

At the end of each week, you should have a list of items to address. Each item will be from mistakes or failures to follow design plans. This is the time you tell your contractor to make the corrections before proceeding. Some will tell you their rework carpenter will take care of it, but I can assure you, if you don't pay them until the mistakes are corrected, the rework carpenter will be on-site the next day.

It's time to start communicating and publishing your projects and progress so you can find others willing to assist you. Looking over YouTube for professionals is a great learning experience, but it doesn't end there. You need people who know code, can spot mistakes from a single picture, and are willing to visit your construction site to give their opinion about the quality of the build.

Your project can be your design or a purchased design and idea from someone else. The most important factors in building your new home or completing a project are to make sure it is safe, strong, functional, and built as designed.

How to guides:

  • Contractor selection
  • Avoiding labor brokers
  • Contractor screening methods
  • Disaster recovery construction
  • Home repair management
  • Skilled trades selection
  • Residential home building
  • Project oversight

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