PTBOCanada Featured Post: Why Choosing Local Construction Companies Is So Beneficial
/Choosing local construction companies over larger, out-of-town ones can have more benefits than you think—especially with large-scale projects. The common misconception is that size and specific experience equals a better end-product. Unfortunately for those in charge of hiring these companies, this isn’t always the case.
Choosing local contractors for one-off, smaller residential and commercial projects is common practice. Many of us know someone who has a small company that has developed a solid reputation for their workmanship on smaller-scale home and commercial renovations, and you would recommend their services in a heartbeat.
Balterre Contracting - 340 Florence Site
However, when it comes to large scale projects—those with a budget of several million—the perspectives around who should be hired for the job changes dramatically. In these instances, owners often look beyond their own backyard, opening the bidding process to many larger, high volume contractors.
This approach usually attracts larger companies from around Ontario with no connection to the communities they’re coming in to do the work for. Because of this, decision-makers need to consider not only what they’re gaining with a larger, supposedly more experienced company—but more importantly, what they’re losing by not going with an equally capable, albeit slightly smaller company, that reside within the region the project is home to.
Beavermead Construction, The Mount Community Centre
Imagine you sit on board of shareholders responsible for sourcing a construction company to develop a brand new, state of the art community centre. You have all the permits in line, a decent budget, and a reasonable timeline.
The board opens the project up to bidders from across the province, which involves companies submitting pre-qualification documents. Included in them is everything from their experience around similar jobs, to size of staff, their unique approach to the project at hand—and of course, budget. The purpose in all of this is to compare all potential suitors to determine who is the most qualified for completing the best job on (or under) budget.
Drain Bros. Underground Storage System, Lansdowne Place
Some think there would be an opportunity for companies to explain how they would be contributing locally—a section that highlights why one company might have a vested interest in the project at hand, but this isn’t the case. As mentioned, this is open to any company—local or not— who have met a certain set of predetermined criteria.
In fact, there are even provincial regulations to prevent favouring local builders (or more specifically, from discriminating against builders who aren’t local). (See Section 5(1) of Ontario’s Discriminatory Business Practices act for more on this).
Parkview Homes
Quite naturally, the larger companies quickly appear as front runners —and it’s easy to understand why. They’ve usually been around longer, have a larger workforce, and therefore have more experience on specific project types. The optics alone make them the fiscally responsible choice. However, there is more to consider than optics.
With these companies mostly located out-of-town, the workforce needs to get to the job site. So, they either have to commute twice a day, or get set up in a hotel. Driving multiple hours daily for several months is a lot of mileage to rack-up. These expenses will need to be recuperated somehow. There’s also the environmental impact of this excessive use of transportation. If the larger, non-local bids are coming in under the bids of the smaller, local proposals, it begs the question of ethics and the quality you're actually paying for.
Kingdon Lakefield
This brings up the next point: accountability. When the project is complete, companies from out-of-town leave. They return to their hometown, to spend money there—and contribute to that city’s economy. Doing so also lets them avoid any potential consequences related to something gone wrong during the project. If they’ve left behind a mess—whether it be quality, financial, or relationship-based— chances are they’re never going to see that contractor again and don’t care.
There’s often no sense of pride or reputation on the line either. They’re there to make a quick buck (usually undercut the local guy) and move on. Sure there may be a name on the side of the trucks, but there’s no face to put to that name anywhere near that job site. If something goes wrong, tracking down the person at the top is much easier said than done.
Thankfully for the decision-makers, there’s another excellent option to consider: the local one. When you consider local, you get to choose from a group of companies with recognizable names on the side of their truck you know—or at least know someone who knows them who will gladly vouch for their work.
Balterre Contracting Installing Storm Water Headwall on Lily Lake
When you’re dealing with a local company, there’s a less likely chance you’ll be shortchanged on a project. There’s no way they could operate that way and expect to be successful. Who will recommend a company that is known to over-promise and underdeliver? The owners and the workers of these companies need to be able to walk around, with their head held high, proud of the work being done within the city they live in. Why? Because they know the people they’re working for—or know that at some point they will cross paths.
In addition to the added accountability and sense of pride among the business owners of these locally owned companies, there is also another huge thing to consider: the impact on the local economy. Take Peterborough and District Construction Association (PDCA), for example, a local board with over 130 members—all of which operate in and around Peterborough, Northumberland, City of Kawartha Lakes and Bay of Quinte Region.
The PDCA’s hire local approach can pay huge regional dividends. Members create more than 125 projects each year, hiring over 2,500 people to help with those projects. It also means big bucks for the surrounding area. Case in point: In 2014 alone, an estimated $250 million was injected into the region, as a direct result of their contributions (1).
In the end, the more localized the company, the better for everyone. It means more accountability because there’s a real reputation on the line. It also means more money staying within the local economy, which is something we can all see as beneficial.
(1) Based on membership and survey results from the Government of Canada
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