Most of my work in the past has come from referrals from local builders. As my business grows and becomes less localized, I am more and more in the position of helping clients find and work with builders who I have never worked with before. An advantage of working repeatedly with the same local builders is that I can do less work as an architect. An example of this is when working with Kent Webster I know to not put much time and effort into detailing cabinetry, stairs and other casework. Kent has many more years experience than I do and if I simply give him enough room he will do something great. With a new builder I am going to be much more careful not to leave any holes in the plans. (read: higher design fees)
In a “cost plus” building contract the builder charges hourly for labor and marks up materials and subcontractor’s bills a certain percentage, usually in the 10 to 20 % range. This is usually only around a third of the total bill so if one contractor marks up 15% and another marks up 20% that may only make a difference of 1 or 2 % on the overall project. Likewise small differences in labor rates; There can be a wide range of efficiency between builders.
The client’s comfort level with entering into a contractual relationship with the builder should be an overriding determining factor in choosing a builder. Is the builder easy to talk to or do interactions feel adversarial? Does the builder come with lots of glowing recommendations? Does he or she do good work? (An architect can help here – I find myself looking for the little touches that tell me this person really cares about their work) Is the contractor accommodating (within reason)? Neat and organized? Friendly and polite crew? Returns phone calls promptly? Doesn't make or offer excuses or blame others? etc.
My discomfort with the bidding process aside from the fact that I have to do a lot more work as an architect much of which is rather dull, stems from the fact that if materials and subs make up two thirds of the total bill and are not likely to be substantially different from one general contractor to the next, than the main difference will come from how good an estimator the contractor is. For them, it is a balance between how much they want the job and how much profit they would like to make. As a client you don’t want to be funding another job that they are losing money on and you don’t want to be the job they are losing money on either.
Hope this is helpful.