Searching out a responsible contractor

Q. In seeking a remodeling contractor, how does one verify his financial responsibility? A friend of mine saw his contractor go bankrupt while on his job and had to pay extra money to others to finish the work. Also, how does one know whether a contractor uses union or nonunion labor? It will affect the pricE, but will nonunion labor be of lesser quality? Might a particular contractor use both union and nonunion labor depending on the work? Ann Hattes Danvers, Mass.

A. Lending institutions, credit, and contractors' associations, and tradesmen may report on the financial responsibility and credit rating of contractors. It is not difficult to ascertain if a builder has a good credit rating, is financially sound, and has a record of paying his bills promptly.

To determine if a builder employs union or nonunion help, just ask him. Nonunion, or sometimes both union and nonunion employees and subcontractors, are usual among small residential builders.

Often, but not always, large commercial projects are handled by contractors employing union help only.

Excellence in construction is determined by the management level of thought and its demand (or lack thereof) as to quality of performance on the job. There are both union and nonunion builders insisting on quality work as well as those who just try to get by.

Affiliation or nonaffiliation with union is thus secondary to the quality of performance. I have seen union and nonunion contractors bidding against each other with sometimes one, and then the other, submitting the lower bid.

Check the jobs previously done by the competing builders to verify comparative quality firsthand, and especially to determine how well they got along with the owners.

Now about that friend whose contractor went broke. This is always a sad commentary especially because the extra cost could have been avoided. How? By requiring the builder to post a performance and labor and materials bond before the work began.

For about 1 percent of the contract price, your friend could have protected himself from the dire economic consequences triggered by contractor insolvency.

A surety bond requires the insurance company to complete the construction project at the original contract price in the event of default by the builder. Insurance companies prequalify certain builders before they will bond them. They are fussy about a builder's character, capacity, and his ready cash.

An unbondable contractor may only be short of cash, but he might also be low in character or trying to do a job which is over his head.

Take your time in making a decision and then proceed one step at a time.