I have written previously about different contract types, such as prime and multiprime. This article is about the responsibilities, advantages and disadvantages that come with bidding a project as a prime contractor. For those not familiar, this type of bidding is when you, the electrical contractor, bid directly to the owner instead of to a general contractor.

Most often, ECs become prime contractors when the majority of the scope is electrical work. For instance, the electrical contractor may be the prime on projects such as adding a generator to an existing facility, replacing damaged switchgear or adding solar to a building. The following are some of the drawbacks and benefits to bidding as such.

The disadvantages

A significant downside of bidding as a prime is that you are responsible for everything and you can not think like an electrical contractor. Your most time-consuming task will be reading all of the bid documents, not just the electrical ones. The bid invitation, instructions to bidders, scope statements for all trades, contract and minority participation requirements are just some of the documents you will be required to sign if awarded the project. 

Regarding the contract, that should be reviewed by a lawyer specializing in construction law. I strongly recommend listening to and considering your lawyer’s recommendations. You may also be required to provide bonds for the entire scope, so make sure you have adequate bonding capacity.

There will be increased management responsibilities such as preparing and updating schedules, as-builts for all trades, compliance with local and federal requirements and increased billing complications. There may be requirements for additional licenses beyond your C-10. Also, if you will be bidding prime contracts for the government, there are considerably more requirements for qualifications, registrations, compliance and paperwork. 

You are responsible for all of the work included in the scope of work specification and will not be allowed to exclude anything. Your job as the prime contractor is to subcontract the scope you cannot perform. Requirements for nonelectrical trades including drywall, masonry, concrete, painting, patching and fencing are common when modifying structures and the site as needed to complete the work. You may even need to build a new structure, such as a small building for new switchgear, including engineering as needed to complete the nonelectrical work.

The advantages

The main advantage of bidding as a prime contractor is the peace of mind that comes from leading a project yourself with best practices in mind. I have never spoken to an EC who has not had problems when this is not the case and they are dealing with a general contractor. My personal experience is that, like in any profession, there are plenty of good general contractors who employ excellent people and are a joy to work with. 

However, there are also general contractors whom I would prefer never to work for again. I have experienced several problems with general contractors that are less than ethical and competent. Slow pay is the issue I hear about most often, and many people tell me they have waited over 120 days for payments.

My biggest complaint is general incompetence. For example, a project manager once tried to force me to install some grounding that was not required by either the bid documents or the National Electrical Code. He even argued with the electrical inspector. Another general contractor had an individual on-site trying to direct changes to the work only through verbal instructions. He refused to give the directions in writing, as required by our contract. Another general contractor never updated the schedule, even though it had slipped within the first two months. And when I asked when he would have a portion of the work completed, he said to look at the schedule.

The most incompetent project manager I knew directed me to install my duct banks before he installed water piping below my duct banks. He directed me to do this in a meeting with the owners and the engineers. I warned everyone in the meeting that this schedule could put my work at risk, but I was still directed to proceed. Predictably, they collapsed the energized 5-kilovolt duct banks in several places.

The takeaway

When you are in control of all aspects of a project, you can prevent problems like these. Of course, make sure you have the resources of people, tools and knowledge needed to take on the type of prime work you bid.

It may seem like becoming a prime contractor is difficult, frustrating, time-­consuming and may not be for everyone. However, there are many private and government sources of help, training and education. The Small Business Administration may be a good place to start, as they have free online courses.