ven the most experienced contractors can find building in Alaska’s environment complex and challenging. From finding the right project to bidding, hiring, and securing permits, construction projects require sharp choices and exhaustive attention to detail from start to finish.

Long before the contract is ever signed, general contractors are busy assessing a project to make sure it fits the company’s goals. Alaska’s builders typically learn about construction opportunities by sifting through bid lists—distributed nightly—that highlight available or planned projects. Bid lists include a comprehensive breakdown of each project’s requirements, making them the preferred method of finding new work.

The Associated General Contractors (AGC) of Alaska, The Plans Room, and The Dodge Report are handy resources for general contractors seeking their next project or performing research about opportunities available across the state. “These are the three different resources that we keep an eye on,” says Jonathan Hornak, senior project manager for Cornerstone General Contractors. “We basically enter all of the projects into a CRM database that keeps them in the front of our minds and helps us keep track of everything that is going on. A lot of the [daily] releases are basically sharing the same opportunities, but the mailing lists allow us to centralize those opportunities.”

It can be tempting for general contractors to pursue ventures that would yield the greatest return on investment; however, the process of picking projects is much more complex. One of the first steps Anchorage-based Cornerstone takes with any list of available opportunities is to weed out the projects that aren’t a fit for the company. “We look at several factors, but the projects that we throw away automatically are the projects that are out of our wheelhouse,” says Hornak. “We don’t do any piers or harbor work, so we can throw those projects away. We’re interested in basically anything other than that marine work, and we try to stay pretty diverse in our client base because there’s no one area that’s going to have a ton of money to support the entire industry.”

Identifying projects that make sense for the company is an essential part of the pre-bidding process, but there are additional factors general contractors must consider. The bid lists that are compiled and released by AGC of Alaska, The Plans Room, and The Dodge Report include projects with a range of deadlines and timeframes. Many of them are prepared to receive bids immediately, though they also include projects that are years away from approval. While it’s beneficial for contractors to plan for future opportunities, Hornak says it’s important to remember that those projects raise more questions, often related to financing. Understanding how long-term opportunities will eventually develop is an essential skill that can help contractors identify future projects to consider.

“A lot of them are projects that you really need to read and understand,” says Hornak. “They’ll pull stuff from the school districts’ ten-year plans and it will show $800 million in school remodels in the next ten years. We see that and know that those projects are on the list to get done, but they’re not going to get bonded or they’ll get bonded at a quarter of what they’re seeing their value is. So, you really have to know what you’re looking at and understand how a project will develop.”

Once general contractors identify a project that fits their firm’s goals, the next step is to find the right subcontractor to partner with to complete the job. Like general contractors, subcontractors have their own areas of expertise that differentiate them from competitors. Over time, general contractors get a sense for how subcontractors operate and can categorize the benefits and disadvantages of working alongside a particular company. Partnerships between general contractors and subcontractors can span just one project or several years. Hornak says Cornerstone chooses subcontractors that give the company the best chance to win bids.

“We try not to play favorites with anybody because what we’ve found is if you play favorites, you’ll lose out on lower bids from subcontractors that could be just as good,” he says. “Usually what it turns out to be is that the subcontractors we favor can get the low bid. They’re aware that a project is out on the street and they have to get their pricing down just as we have to get our pricing down if we want the job.”

General contractors lead the charge during the pre-bidding hiring process, but subcontractors still have quite a bit of control over the final results. Subcontractors aren’t bound to specific general contractors, so they can submit multiple bids to various general contractors that are all vying to win the same project. “The competitive advantage in that circumstance basically comes down to your relationship with that subcontractor,” says Hornak. “Sometimes if a sub really likes you and you’re easy to work with, they’ll give you a cheaper price than your competition. That’s why relationships are so important—having strong relationships can help you gain a competitive advantage.”

General contractors consider their past experiences working with subcontractors—if they do have a previous work relationship—as well as the subcontractors’ qualifications and skillsets, but decisions often come down to the financial component.

“For a lot of projects, we are forced to really just choose the lowest price, especially in the market nowadays,” says Hornak. “But if we have an option, it comes down to who we know will have the most covered and who will be the easiest for us to work with. We really try to build a team mentality into every project. We don’t like to be the stereotypical contractor; that’s not us. We try to pick owners and subcontractors to work with that really understand that because it makes our life easier.”

After a general contractor identifies the best subcontractor for a job and the two sides iron out the details of their partnership, they shift their attention to formatting a bid that will entice the client to work with them. Organizing a bid is generally a two-week process for smaller projects and ranges from four to six weeks for larger projects. Hornak says he’s structured bids in as little as five days, though he adds that Cornerstone generally passes on projects that demand bids on short notice.

Arranging a bid can be a tension-filled process because of all the moving parts. For hard dollar contracts, even the smallest details need to be amended before a bid is ready to be submitted.

“The hard dollar projects are a very forward process for a decent-sized job. We have three or four people working on it, estimating and coordinating with subcontractors. We compile it all into one document, and that turns into our bid for hard dollar projects.”

Creating a plan that meets a client’s needs requires collaboration between multiple stakeholders, including engineers, architects, and financial analysts. Throughout this process, general contractors maintain open communication with their partner-subcontractors to make sure their vision works for both parties.

Engaging with subcontractors is crucial to the bidding process; submitting bids can be hectic and solidifying the financial components tends to require consistent back-and-forth communication. “When we turn in a price, we have to be able to complete the project for that price,” says Hornak. “Our subcontractors bid to us and that even happens minutes before we turn a bid in to an owner. We have to analyze all of the bids to make sure we’re all covered so we don’t have any big gaps that would lose money.”

Projects that include the construction manager/general contractor (CM/GC) delivery method or design/build models require a different approach. For CM/GC, an owner will hire a general contractor to provide feedback during the design phase before construction begins. The process can be beneficial because it can improve cost control and cost certainty, reduce risk, and allow for the general contractor to play an innovative role in the design process. Design/build projects give general contractors complete control of the design, an advantageous method that can save time and money because the general contractor is knowledgeable about every detail of a project.

“CM/GC and design/build are a completely different approach and pursuit process,” says Hornak. “Those two are more based on the proposals. The bidding process is more about technical writing and selling ourselves based on our qualifications.”

Established firms throughout Alaska have the benefit of having a reputation, which certainly helps increase their chances of securing contracts. But aside from maintaining a strong standing in the community and having the resources to submit the cheapest bid, there is a basic formula that can help general contractors land projects. Hornak stresses that the most important aspect of the bidding process is attention to detail and says the best advice he would offer other general contractors is to be meticulous throughout the process.

“You’ve just got to do your estimate and get your pencil sharp,” he says. “You really need to make sure that you have your bases covered.”

Once the winning bidder is chosen, it’s time for negotiations. Cornerstone starts the negotiation process the same way for every job: by drafting its subcontractors’ contracts and solidifying its budget. The negotiation process gives the project owner and general contractor opportunities to raise questions or concerns before settling on a final agreement.

“The owner sends the final contract and then you have to get it through your insurance company and your bonding company, and then they’ll come back with comments,” says Hornak. “You’ll bring their comments to the owner and say, ‘Our insurance brought these issues up, can we discuss this?’ and then you’ll sit down with the owner and negotiate those terms.”

The relationship between the general contractor and project owner can help ease negotiations, and though the winning bidder can negotiate the contract, Hornak says deals rarely fall through once Cornerstone is awarded a contract. “Most of the time, there aren’t any issues with owners that we work with,” he says. “We just get the contract, sign it, and send it back. It just depends on who we’re working with and how frequently they build.”

The final step after winning a contract and before starting construction is the permitting process. Alaska’s short window for summer construction projects makes it difficult for local municipalities to respond to permitting requests in a timely manner. “The [Anchorage] municipality can be very backed up. Especially in the springtime when everyone is trying to get their buildings submitted and permitted, they could be backed up six or even eight weeks,” says Hornak. “We could win a job and we might have to sit there waiting for permitting for a month or two; it all depends on the owner and where they’re at with the process.”

If there’s one benefit about the permitting process, it’s that general contractors typically aren’t involved if it’s a hard dollar contract. They are more involved for design/build, though Hornak notes it is possible for the permitting process to be staggered, which allows construction to start slowly while permits are being finalized.

“When design/build projects happen, we work with the municipality to phase the permitting process to get on the site,” he says. “They’ll permit our foundation so we can get the foundation in and then a couple months later, after all of the structural and architectural design is done, they can permit the actual full building so we can get inspections done. There are ways to work around the slow permitting process.”