What is a General Contractor?
What is a Construction Manager?
Construction Manager vs. General Contractor
How these roles work together
The roles of a general contractor and a construction manager are similar because they both involve construction projects and share responsibilities like hiring subcontractors and managing resources. However, they have distinct requirements, duties, and expectations when working on a project. The significant difference is in their roles on the project: a construction manager ensures the project's contractual compliance and adherence to the timeline without performing the physical work. On the other hand, a general contractor is responsible for executing the actual construction work according to the contract. In this article, we'll look into each role, explore their differences, and understand how they collaborate on a project.
A general contractor offers a broad range of services for construction projects, from bidding on the project to executing the construction work. They can take on hands-on tasks such as painting, carpentry, and plumbing or serve as supervisors, ensuring their subcontractors meet their quality standards. The general contractor's primary role is to ensure the project's smooth operation and adherence to the plan. They typically receive a project design and focus on planning its execution to meet the client's expectations and their project bid.
When a client hires a general contractor for a project, the contractor usually submits a proposal outlining the estimated cost and projected completion timeline. Project owners evaluate various proposal selection factors, including cost, the contractor's experience, and personal preferences. During the project, the general contractor must adhere to their proposal, striving to complete the project efficiently within the budget to generate a profit.
Operational requirements for general contractors can vary by state. Most states impose licensing, insurance, and bonding rules on general contractors, but these regulations differ. Researching and understanding specific state requirements is essential as practicing without a bond or license in place can result in fines. Regarding earning potential, general contractors' average income varies by location, but the national average is approximately $70,000 annually.
A project owner hires a construction manager to oversee the entire project, from project planning to construction completion. Construction managers will usually have years of experience in the field and may also have a degree or certification in construction management. Project owners often hire a construction manager for their expertise, saving them the need to become construction industry experts. Construction managers assist project owners in design, budgeting, and selecting sub-contractors. They also ensure the project is delivered according to the agreed timeline and standards. They do not perform physical construction tasks but serve as project supervisors.
Getting hired as a construction manager requires demonstrating knowledge, capability, and trustworthiness to project owners. Prospective construction managers can take steps to demonstrate these qualities:
Experienced in Contracting: When considering a construction manager for a project, project owners often prioritize the manager's experience in the construction field. There are various avenues to gain this experience, from apprenticeships to hands-on work experience. Demonstrating a track record of handling significant projects and managing teams suggests readiness for the role of a construction manager. Prospective construction managers can benefit from diversifying their expertise across different stages of the construction process.
Strong Relationship Builder: Contracting can be a very relationship based business since there is a lot of trust involved, especially for larger projects. Building strong client relationships is an excellent strategy to earn their trust in your knowledge and abilities. A general contractor with a proven history of delivering exceptional work to a client may find future opportunities as a construction manager rather than a general contractor. When nurturing these relationships, it's essential to carry yourself with the demeanor of a construction manager, even before officially assuming the role. Demonstrating your ability to act as a construction manager in advance can assure project owners of your capability and readiness for the position.
Construction managers are paid a flat fee for their services, allowing project owners to be confident that their interests are the top priority. The fee varies based on the project's size and complexity, with an average income of $131,000. Larger and more numerous projects can result in higher earnings.
Construction managers and general contractors share many similarities but differ in their responsibilities, client relationships, selection processes, and compensation methods. Understanding these distinctions is essential for making informed decisions in project management. There are four significant differences.
Construction Manager: Owners typically hire a construction manager early in the project's planning phase. The construction manager assists in selecting the general contractor and other project team members. They help evaluate bids and proposals, considering cost, schedule, and qualifications. Various factors can impact the hiring process, but project owners often want to see a construction manager with experience and expertise, someone they can trust as an advisor.
General Contractor: The general contractor is typically chosen through competitive bidding. They submit a proposal outlining their plan, cost estimates, and timeline. The owner reviews these proposals and selects the general contractor based on their suitability for the project. When hiring a general contractor, a client will look at many factors, like the bid proposal’s cost and timeline and the type of experience a general contractor has.
Construction Manager: A construction manager primarily oversees and manages the project but doesn't physically perform the tasks. Instead, they coordinate the various aspects of the project, including hiring general contractors, scheduling, and budget management. They're also responsible for determining surety bonding requirements for the project if the project is private. If it's a federal project worth over $100,000, a contractor license bond is required by law.
General Contractor: In contrast, a general contractor takes on a more hands-on role in the project. They are responsible for executing the construction work directly or hiring subcontractors to complete the tasks. They ensure that the project is built according to specifications and plans.
Construction Manager: Construction managers are often compensated through a flat fee or a percentage of the project's total cost for the advising and supervising services they will be providing. Their compensation is not tied to the project's construction costs.
General Contractor: General contractors, on the other hand, are compensated based on the actual construction work performed. Their payment is typically tied to completing specific milestones or stages of the project. The general contractor is paid for their services, so if the project were to go over their bid amount, the client would be responsible for paying the general contractor the additional amount.
Construction Manager: Construction managers work closely with the project owner, offering guidance and expertise throughout the project's lifecycle. They act as a trusted advisor, helping owners make informed decisions. Since they are paid a flat fee for their services, the owner can be sure that the construction manager is acting with their best interests in mind and that their choices are not driven by cost.
General Contractor: General contractors, while also having a relationship with the owner, primarily provide construction services. They execute the construction plan and work to meet the owner's expectations based on the agreed-upon bid. The general contractor is providing services to the client and, therefore, can have a financial incentive to look for additional services they can provide and be compensated for.
While construction managers and general contractors play crucial roles in the construction process, their responsibilities, relationships with the owner, hiring processes, and compensation differ. Construction managers focus on project oversight and advisory roles, while general contractors are more directly involved in the physical construction work. Their roles go hand in hand, and they often work closely together on a project.
A general contractor and a construction manager play distinct roles in a project, yet they collaborate closely to meet the client's goals. The construction manager often assists in selecting one or more general contractors for a project based on the project's scale and complexity. Project owners trust the construction manager's expertise to make informed decisions about hiring the right general contractors and evaluating their bid proposals. Multiple general contractors may sometimes work under the same construction manager, especially for larger projects. Both the general contractor and construction manager might also engage in hiring subcontractors. Still, it's the construction manager's responsibility to ensure that the work of the general contractors and subcontractors meets the required standards.
Once the project starts, the construction manager takes on more of a supervisory role. They oversee the quality of work and ensure the project stays on schedule. They maintain regular communication with the general contractor to monitor the project's status and address any issues that may arise during the construction phase. Meanwhile, the general contractor manages the day-to-day operations of the project. If the general contractor has subcontractors, they oversee these subcontractors to ensure that their work aligns with the expectations of both the general contractor and the construction manager. The construction manager acts as a bridge, facilitating the exchange of project information between the general contractor and the client.
Upon project completion, the construction manager conducts a thorough review to ensure that the work meets the contract terms and the client's expectations. If any adjustments are necessary, they collaborate with the general contractor to address them. During the project's warranty period, the construction manager remains the primary point of contact for the client in case new issues arise. They may work with the same general contractor or a new one to resolve these issues. This cooperative relationship between the construction manager and the general contractor is vital in achieving a successful project outcome.
A construction manager and general contractor bring their responsibilities and benefits to a project. A general contractor completes the work according to the client’s expectations and bid proposal. A construction manager can act as an advisor to the client because of their expertise in the industry and will ensure that the work is being completed correctly. In many ways, both roles can do similar things given their experiences, but their roles differ once hired for a specific project. Both of these roles play a vital role in the construction industry. We’d encourage you to research further to become a general contractor or construction manager.