Do I Need a General Contractor, or a Construction Manager
Are you about to begin a construction project for your business? Is the whole process starting to seem overwhelming and confusing? Entering the construction world is borderline equivalent to learning a new language involving terms such as Project Manager, Construction Manager, General Contractor, Design Build, Build to Suite, Design Bid Build, Time / Material, and the list goes on and on. It’s easy to see how it could be confusing. Two of the terms, General Contractor and Construction Manager are referring to the management structure or project delivery method. Project owners don’t always know the difference between two, nor do they know which one to seek out for their next project. What makes it even more confusing is that there are several similarities between a Construction Manager and a General Contractor, but equally as many differences.
General Contractors are hired as the prime contractor for any given project, they are the only contractor with a contract directly with the owner, and they either self-perform the work, hire subcontractors to perform the work, or a combination of the two. The typical process for hiring a General Contractor would be to contact a design professional, complete project documents, and then use one of the many available venues to advertise your project for potential General contractors to provide you with a bid. Your design professional can help you select eligible General Contractors to invite to bid, maybe you know some companies you can contact, or you can utilize an online job posting website such as www.thebluebook.com to advertise your project to companies in your area that are interested in bidding on more work. The General Contractor will then put together a complete bid based on all of the plans and specifications you and your design team have prepared. Then you would select the General Contractor based on whatever criteria you deem relevant such as price, work history, references, etc. then the selected General Contractor starts work on your project. The downside to this is that the General Contractor is forced to complete the project within the budget and timeline provided in their bid, and if the General Contractor was chosen based on price alone, it means they have limited funds to work with. If something was overlooked or not accounted for in their bid, they have to either try save money and time somewhere else, lose money on your project, or submit change orders for the additional work costing you more money.
Typically the cheapest up front
Brings construction knowledge and project experience to the project
The cheapest rarely means the best qualified
Cost increases can come later in the project
The General Contractor has very little input early in the construction process to provide valuable insight into potential issues and possible money saving alternatives
Construction Managers are typically hired very early in the Construction Process. Construction Managers can be hired in a similar manner as a General Contractor, you can advertise the project requesting proposals, or you can negotiate a price with someone you already know and trust, and have possibly worked with in the past. Hiring the construction Manager early in the construction process is an invaluable asset to help in the design phase – see our blog post on Project Planning. Once the construction documents are complete the Construction Manager will obtain proposals from the necessary sub-contractors to complete the work and evaluate their bids to determine which sub-contractor is providing the best value. The Construction Manager will prepare contracts for the Sub-Contractors, who will be contracted directly with the project owner. The Construction Manager will also manage and oversee the sub-contractors work on site to ensure it is consistent with the construction documents, high quality, and completed on schedule.
Creates more of a team environment
Better more inclusive bids from sub-contractors
Early involvement can help create better construction documents
Less competition in bidding can result in overall higher project costs
Many construction firms are willing to enter into project contracts as either the General Contractor or Construction Manager. Both methods of project delivery methods have benefits and detriments. Regardless of which construction method you choose be sure to carefully vet your contractor, (see our post about Selecting a Qualified Commercial Contractor) to make sure they are the most qualified candidate for the project. If you hire a highly qualified construction firm, that can provide positive references from past projects, both project delivery methods have the potential to achieve great results.