Construction projects in parking facilities are among the most complex vendor relationships a facility manager manages. Unlike service contracts where performance is ongoing and observable, construction projects involve large upfront commitments based on promises about future work — what will be built, to what standard, on what timeline, and at what cost.
Selecting the right construction contractor, establishing the right contract terms, and actively managing the project are all essential to getting what you paid for.
Project Types and Their Contractor Requirements
Different parking construction projects require different contractor qualifications.
New parking structure construction requires a general contractor with experience in parking structure construction specifically. Parking structure construction involves precast or cast-in-place concrete, post-tensioned concrete, or structural steel systems that require specialized subcontractors and construction management experience. General contractors who build other commercial structures but have not done parking structures are not qualified for parking structure construction.
Parking lot construction and renovation (paving, grading, drainage) is civil construction work. General contractors or specialty civil/site contractors with commercial paving experience are appropriate.
Deck waterproofing and concrete repair are specialty trades. Contractors who perform these tasks must have demonstrated experience with parking structure applications specifically — the materials, preparation standards, and environmental conditions in parking structures differ from general commercial construction.
PARCS installation involves both electrical and low-voltage work. Electrical contractors licensed for the applicable work, with PARCS installation experience, are required. Many PARCS vendors provide installation through their own installation teams or certified subcontractors; this may simplify contractor selection for the technology work.
Contractor Prequalification
For significant construction projects, prequalification before soliciting bids ensures that you receive proposals only from qualified contractors, reducing the time spent evaluating unqualified submissions.
Prequalification criteria:
- Years in business and specific experience with similar project types
- Licensed and insured (verify license numbers and insurance certificates, do not just accept self-reporting)
- Financial capacity to complete the project (bonding capacity, evidence of financial stability)
- Safety record (OSHA incident rates, EMR — Experience Modification Rate)
- References from comparable projects
Experience Modification Rate (EMR): The EMR is a key safety indicator for construction contractors. An EMR below 1.0 indicates a better-than-average safety record; above 1.0 is worse than average. Require an EMR of 1.0 or below for most construction projects. Contractors with EMRs above 1.2 have materially worse-than-average safety records and present higher risk.
Bonding: For projects above $100,000 (and particularly above $250,000), require contractors to provide performance and payment bonds. Performance bonds guarantee that the work will be completed even if the contractor fails; payment bonds protect subcontractors and material suppliers from non-payment by the general contractor. The requirement to obtain bonds screens out financially weak contractors before bid opening.
Bid Document and Specification Quality
The quality of your bid documents determines the quality of the proposals you receive and the enforceability of the resulting contract.
Complete design documents. For structural work, a licensed engineer should prepare construction drawings and specifications before bids are solicited. Bidding without complete design documents results in proposals with large contingency allowances and change orders after work begins.
Material specifications. For specialty work (waterproofing, concrete repair, pavement), specify materials by performance criteria or approved equals, not just by proprietary product name. Allowing specified-or-equal bids opens competition while ensuring you get qualified products.
Scope of work clarity. Define the project scope unambiguously. What is included? What is excluded? What are the start and completion dates? What working hours are permitted? Scope ambiguity produces change order disputes.
Site access conditions. Describe any operational constraints on the construction — which areas must remain operational during construction, when access to areas is restricted, and any site safety requirements.
Bid Evaluation Beyond the Bottom Line
Selecting the low bidder without evaluating bid quality and contractor qualifications is a frequent cause of construction project failures.
Scope verification. Before comparing bid prices, verify that each bidder has included the complete scope of work. Bids that exclude items that others included are not directly comparable. Require clarifications from bidders who appear to have missed scope items.
Material specification compliance. Verify that bidders have specified the materials required by your specifications. Substituted materials that appear equivalent may not perform equivalently. Require documented justification for any proposed substitution.
Schedule evaluation. Compare proposed construction schedules to your requirements. A low bid that requires double the construction time of your target completion is not the right choice if timely completion is essential to operations.
Subcontractor information. For general contractor bids, require disclosure of major subcontractors. If a GC is proposing to use a subcontractor for specialty work, evaluate the subcontractor’s qualifications as part of bid evaluation.
Contract Terms for Construction Projects
Construction contracts have specific provisions that differ from service contracts:
Payment terms: Milestone-based payments for construction projects protect the owner by linking payment to verified progress. A 10 percent retainage (withholding 10 percent of each payment until substantial completion) provides financial incentive for the contractor to complete and address deficiencies.
Change order procedures: Define how changes to the scope are authorized and priced. All changes should require written authorization before work proceeds. Emergency changes may be authorized verbally with written confirmation within 24 hours.
Substantial completion and punch list: Define what constitutes substantial completion and the process for developing and resolving the punch list (the list of incomplete or deficient items). Payment of final retainage should be conditioned on punch list resolution.
Warranty provisions: State the contractor’s warranty period and obligations for defective work discovered after acceptance. Standard construction warranties are one year; require longer for specialty systems.
Liquidated damages: For projects where timely completion is critical, liquidated damages provisions ($500 to $2,000 per day of delay, for example) provide a contractual remedy for schedule failures. These must be calibrated to actual damages to be enforceable.
FAQ
What is the best way to manage a construction project that continues while the facility is operating? Develop a detailed phasing plan that shows which areas are under construction at which times, where temporary parking will be available, and how traffic will be managed through the construction zone. Communicate the plan to regular users before construction begins. Appoint a single construction liaison who is responsible for daily communication between the contractor and facility operations.
Should I hire an owner’s representative for a significant parking construction project? For projects above $500,000, an owner’s representative (often a construction management firm or experienced project manager) provides independent oversight of the contractor, manages the RFI and submittal process, conducts payment application review, and protects your interests in change order negotiations. The cost (typically 3 to 5 percent of construction value) is usually recovered through better cost management and issue identification.
What happens if a contractor’s work fails within the warranty period? Issue a formal written warranty claim identifying the specific failure, the contract warranty provisions you are invoking, and a reasonable deadline for remediation. Preserve the failed condition (photographs, physical samples if applicable) before any remediation. If the contractor disputes the warranty claim, consult legal counsel before proceeding with alternative remediation.
How do I evaluate a construction bid that is significantly lower than other bids? Low bids warrant scrutiny. Request a scope verification meeting to confirm the low bidder has included the complete scope. Ask specifically about the major cost drivers (materials, labor, subcontractors) and verify they are aligned with other bidders. An unusually low bid may reflect: a scope error (missing something), a material substitution, substandard labor rates, or genuine efficiency. Understand which before deciding whether to award.