Construction Manager vs General Contractor: Have you ever wondered what the distinction between a general contractor and a construction manager is?
Getting the intended results on a huge building project is a significant issue that they face on a daily basis. Coordination of the various layers of subcontractors, suppliers, and front office workers requires care and patience, and there are thousands of other individual elements to consider and account for. People in charge of managing these critical duties often fall into one of two categories: general contractors or construction managers.
Both positions have the same goals: to put all of the parts together and execute the design as the project owner desires. Investigate the parallels and differences between these two roles.
What Exactly Is a General Contractor?
General contractors are in charge of the day-to-day running of a construction project on-site. They are in charge of reviewing an architect’s plans, putting together a proposal package for how much they believe the project will cost (as well as the contractor’s own overhead, profit margin, and fees), and then submitting the bid to the project owner.
Because of the framework of the bidding process, a general contractor is incentivized to keep the project under budget—if the project ends with unused cash, the general contractor gets the difference. If the project’s budget is exceeded, it is the general contractor’s responsibility to obtain more funds from the project owner.
- A general contractor’s usual responsibilities range from the beginning to the completion of the project and include:
- Identifying which subcontractors will be required to perform which tasks.
- Managing subcontractor bids, selecting winners, and assembling a bid package
- Coordination of on-site work by a variety of subcontractors, including builders, plumbers, electricians, and landscapers.
- When the organizational structures are examined, it is generally evident that a GC is a regular corporate company. A general counsel usually has its own staff. They frequently have foremen or superintendents who work primarily on the job site, as well as general laborer, carpenters, or other skilled trades.
- Informing the project owner on project timeframes, delays, and additional requirements.
- Coordination with suppliers to ensure that all construction materials are ordered on schedule, in the appropriate quantities, and according to specifications.
- Communicating with architects and designers about modification orders, supply problems, and other potential stumbling blocks.
- Working with regulatory authorities to guarantee that inspections are completed on time and that all aspects of a project are in accordance with building codes.
While some general contractors are granted projects based on prior work or contacts with an owner or architect, others must submit a competitive proposal. The architect provides the general contractors asked to bid with completed designs and specifications on which to base their proposals. The general contractor then gathers quotes from multiple subcontractors (typically picking the lowest price bids to keep their overall bid proposal to the owner competitive) and includes any additional markup and overhead charges in their bid submission. The owner normally awards the project based on price and quality after considering all of the submitted proposals from various general contractors.
The general contractor is extremely determined to complete the project within budget. When the total cost of the completed project is less than the bid price, the general contractor benefits and keeps the unused cash as profit. Any cost overruns, on the other hand, need asking the owner for additional funds or modifying the project scope. This is more common because the general contractor was not involved in the pre-construction process to help provide more accurate estimates.
What Exactly Is a Construction Manager?
A construction manager often performs identical duties to a general contractor, but with a broader scope of responsibility and a distinct financial incentive system. A general contractor’s responsibilities are primarily limited to on-site management of subcontractors, budgets, and suppliers, whereas a construction manager provides these services while being involved in the project from the start. A construction manager frequently contributes to the design stage and collaborates with the architect and project owner to ensure that the project’s goals and financial arrangements are realistic and achievable.
A construction manager typically collaborates much more closely with the owner than a general contractor and is considered to be part of the owner’s team rather than working for themselves. A construction manager is often paid a fee by the owner rather than being motivated by budgetary considerations like a general contractor. When compared to projects using a general contractor and bid system, this financial structure creates less friction between owners and construction managers.
There may be significant overlap between the two roles. A project owner who has a long-standing relationship with a reliable general contractor may bring them on board early in the design process in a capacity similar to that of a construction manager. This provides project owners with the “best of both worlds” advantage since it eliminates the sometimes contentious interaction between contractors and owners while keeping the contractor’s ties with (and direct accountability for) the subcontractors. A CM could be a single person or a group of people.
A construction manager’s duties include the following:
- Working with the engineers and architects assigned to a project to ensure that it works smoothly
- Hiring low-level project managers to oversee specific aspects of a project, such as plumbing
- Developing project budgets and work activity schedules
- Analyzing and advising colleagues on contracts or technical material
Which Is Best for Your Building Project?
- Several factors influence whether a project owner employs a general contractor or a construction manager. The following are some common points that many project owners utilize to make their decision:
- A general contractor may be the best choice for a project if:
- The traditional construction bid approach is preferred by the owner.
- The owner does not have the time to collaborate closely with the project managers.
- The owner prefers that the contractor assume complete accountability for their subcontractors and their work.
- The owner wants to hire someone who already has a network of reliable contractors.
It may be a good idea to hire a construction manager if:
- The owner does not want to go through the typical general contractor bid procedure, a construction manager may be the correct choice for the job.
- The owner prefers a more collaborative approach, with the manager involved in the design stage.
- The owner would want to pay a set fee.
- The owner desires the management have a more detailed and complete understanding of the overall financial structure of the project.
Owner relationships differ greatly between GCs and CMs. GCs are typically awarded new projects through competitive bidding and so serve as third parties in a construction process that also includes the owner and design/engineering teams. The general contractor delivers a fixed fee and constructs all aspects of the project that are specified in the contract.
If the GC spends less than the bid price, he or she makes a profit. When unforeseen complications develop that aren’t previously covered by the contract, the owner must pay additional fees to cover the costs, amend the requirements, or lower the project’s scope. In certain aspects, a GC’s relationship with the owner might be viewed as competitive.
Construction Managers as Owner Partners
CMs, on the other hand, work at the request of the owner and for a fixed percentage of the entire project cost. The CM helps with pre-construction and subsequently manages construction, usually by employing subcontractors or, on larger projects, one or more general contractors. CMs often only work with proprietors with whom they have a mutually beneficial connection.
General Contractors Acting as Construction Managers
It is not rare for a GC to serve as a CM for some owners. In rare situations, a general contractor (GC) may have completed a few projects for a specific owner and formed a trusted relationship with that owner. At some point in the future, the owner may ask the GC to work as a CM on a new project. The motive is less about money and more about trust and a liking for the style and substance of the individual’s construction. There is little doubt that a personal relationship has grown, and the owner values being familiar with the CM’s work, which makes working on projects together less “surprising.” Owners that choose to engage with CMs are concerned with consistency and may be warier of hidden risks.
Constriction Managers typically list the following benefits to the owner:
- CMs work from a set price, so they aren’t in a competitive relationship with the owner, attempting to keep costs low so they can profit on their bid amount.
- CMs join the project early in its creation and provide advice on the realities of costs, features, requirements, and materials to help arrive at more realistic estimates because they participate in the pre-construction phase.
- Because the CM is involved in the project early on, he or she can recommend changes to methods and materials that will result in a higher value in the ultimate output.
- There is more versatility in making changes and defining the project’s scope.
- All building expenditures are accessible to the owner.
- Parts of the work can be bid on at various periods.
- Choosing a CM is based on qualifications rather than pricing.
- Because of their engagement earlier in the project, CM projects typically have fewer change orders.
- The owner can assess risks and design bonds accordingly.
Are the general contractor and project manager the same?
For those wondering what a general contractor is responsible for, the answer is that general contractors are used for the physical building of a project. Project managers, on the other hand, coordinate and supervise the construction process.
Which is superior: project management or construction management?
The primary distinction is the level of authority. A construction manager is in charge of all construction activities. A PM oversees the CM. The project manager bears extra accountability for the project because he or she manages more than just the construction process. As a result, a project manager will frequently supervise a construction manager.