1. Housing Rehab Contracting
National Community Development Association
January 24, 2018

2. Choosing Contractors The client can choose any contractor, as long as:
Licensed with the City (right license for the type of work)
Registered with the State
Insured (Bonds for $100k or more)
Not debarred
Lead certified (as needed)

3. Contractor Experience
To keep a list or not?
How much to help clients when choosing contractors?
When they pick someone we haven’t worked with before, or….
…When they pick someone we (unfortunately) have worked with before.

4. Relationships Remember proper roles:
Client signs agreement with the contractor
Client signs agreement with the City
City and contractor DO NOT have an agreement
THINK: What would a regular bank do?

5. Who Agrees to What? Contractor agreement governs the WORK
Client and Contractor sign
Loan/Grant agreement governs the MONEY
Client and City sign
Conditions of Agreement governs BEHAVIOR
City provides compliance framework, pays contractor on behalf of client from clients loan/grant funds.

6. CLIENT agrees to: Contractor agreement: Loan/Grant agreement:
Agrees to allow access, provide power/water, make timely decisions, authorize payment per specifications for work completed.
Loan/Grant agreement:
Agrees to the amount being borrowed/granted, terms of repayment or forgiveness, consequences for default, allows City to pay contractor on behalf of client.

7. CITY agrees to: Loan/Grant agreement:
Agrees to ensure compliance of both parties with federal requirements.
Agrees to pay contractor on behalf of the client, perform progress inspections, assure quality and timely work.
Agrees to payment/forgiveness terms for funds, servicing requirements, consequences for default. May include escrow or other requirements (varies by state).

8. CONTRACTOR agrees to: Contractor agreement:
Agrees to complete work as described in contract specifications, use specified materials, keep to schedule, meet expectations for access, cleanliness, behavior
Agrees follow regulatory and reporting requirements, local building codes, etc.

9. Conditions of Agreement
Signed by both Client and Contractor
Governs behavior of client and contractor
Spells out City’s right to oversee work, inspect, stop work for non-compliance
Examples:
Contractor: no smoking or pets on job site, must clean up daily, materials must be new, must provide all warranties and rebates to client
Client: must provide access 8am-5pm, must provide water/power, must move belongings prior to job start

10. What about Subcontractors?
Contractor is responsible for selecting and supervising subs – but must identify them from the beginning.
All subcontractors and alternates should be listed in the Contractor Agreement at the outset – changes require amending the agreement!

11. Keeping Contractors Happy:
Clear, concise, detailed specs
“Start by” date – planned delays are OK, not showing up isn’t
Regular communication/inspections
Quick payment
Resolve problems quickly

12. Talk about the fine print
Retention amounts
Start/end dates
Payment procedures
Material brands/quality/quantity
Program inspections v. permit inspections

13. Program v. Permit Inspections
Program inspections ensure federal compliance
Work done to spec
Project on schedule
Correct materials used
Work completed prior to payment
Permit inspections ensure local code compliance
Carried out by different, qualified staff

14. When things go bad… Remember proper roles:
Client and contractor have a legal relationship
City can assist in resolving THEIR disputes
Only client/contractor can terminate the agreement
THINK: What would a regular bank do?

15. When all else fails The City isn’t a regular bank, so -
Grievance policy
Contract clause for payment in the event of dispute
Contract termination provision

16. Evaluate Contractors
Evaluation by Client and City Staff at the end of EVERY project
Keep on file
Meaningful metrics
Number of days off the site
Corrections/stoppages required
Repeat inspections necessary
Can use to prevent future problems

17. Questions Heather Johnson Davenport, Iowa hjohnson@ci.davenport.ia.us