construction team on site

Will Owners Pay More for Quality Work?

05/15/24

Can you imagine living in a world where construction project owners and developers pay more for quality work and excellent service? If you have been in the business for a while, you probably never dreamed this might come true…or has it?

Recently, the Construction Owners Association of America (COAA) Leadership Conference handed out a survey to attendees. COAA is comprised of organizations, institutions and companies that regularly engage in building construction projects as the owner or developer. The members include public entities, universities, federal and state agencies, as well as private companies and major developers.

The survey asked the attendees to answer how much quality and service matters when selecting contractors, subcontractors, and suppliers. The results were unexpected, yet encouraging to every contractor in the room who emphasizes quality and value over the lowest price.

Quality and service matter

Ninety-five percent of the owners surveyed stated quality and service matter when selecting contractors, subcontractors, and suppliers. Many owners explained that they use pre-qualification and selection procedures that weed out the troublesome or problem contractors early on in their selection process.

Eight-nine percent of the respondents stated their belief that construction owners and developers will pay more for quality and service, despite the usual impression that a project is awarded based primarily on low price

How much more will they pay for quality workmanship, construction, contracting, and materials?

Thirty-six percent will pay one to four precent more; 36 percent will pay five percent more; 18 percent will pay 10 percent more; and only 10 percent will not pay more.

How much more will construction owners and developers pay for good service from contractors, subcontractors, and suppliers?

Forty percent will pay one to four percent more; 30 percent will pay five percent more; 17 percent will pay 10% or more; and only 17 percent will not pay more.

Quality versus service

There is a compelling fact to consider from these results. Construction owners and developers will pay more for quality over service. This seems to contradict the ever- increasing demand for perfect service and on-time completion in the customer-focused business climate that contractors operate in. The conclusion? Finished product is more important to owners than how they get there. In other words, poor service, and lots of headaches during construction are not as painful as a completed project with poor construction quality.

Four out of five construction owners say they will pay more

How much more the owners will pay depends on their needs, challenges, and project goals. In order for contractors to cash in on this revelation, they must determine what their customers specifically want on each project. Focus on the important issues that make a difference to the owner and developer. Find out what matters most and is the top priority by asking before the proposal is made, and addressing it in full detail.

Even though low price appears to be the deciding factor in selecting construction service providers, it is not the only factor. During the selection process, every member of the project team must focus on providing what their owners clearly want– service, quality, or price. By asking probing questions, contractors can determine how to solve their customers’ problems and concentrate on making the owner’s project a success. When contractors give their owners exactly what they want, they will then get paid what they want. This is the true “win-win” outcome.

Business - Commercial Construction Industry

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This article contains general information only. Sunflower Bank is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, before making any decisions related to these matters, you should consult a qualified professional advisor.