The recommendation I am presenting is similar to the advice I received while skydiving. If your parachute malfunctions, you must quickly assess the magnitude of the failure. Total failure is easy: break away from the chute and go for the reserve. However, a partial malfunction is not so easy. You have to decide how to react based on the consequences you may face (broken leg vs. broken neck). If you break away from the main chute and the reserve fails, there are no backups.
 

The same holds true for construction projects. If your contractor is out of business, your choice is clear. Break away and go for one of the following reserves:

• Hire a contractor to finish the project and work with the existing suppliers and subcontractors, or
• Attempt to finish the project utilizing the same subcontractors and suppliers, and hire the contractor’s former employees to oversee the project.

When making your “reserve” decision, be sure you know why your original contractor went out of business. For example, don’t hire former employees of your contractor if they were the cause for failure.

It is important to work out any remaining difficulties with subcontractors and suppliers so you do not run into lawsuits.

The next blog will be on how to keep your contractor until your project is finished.