The Differences Between General Contractors And Construction Managers
General contractors and construction managers are some of the most important professionals in any construction project, although it can be quite confusing to pinpoint the differences between them. It is especially important to define the roles that each type of professional plays, since they are so often assigned the lead contractor role in commercial construction projects.
The fact of the matter is that there are actually many areas in which the roles of both types of professionals overlap. General contractors in particular often perform roles similar to that typically assigned to a construction manager, such as hiring sub-contractors instead of using their own teams. Nonetheless, general contractors are construction managers play distinct roles in the construction industry, and there are a number of clear differences between them.
The role of the general contractor
In most cases, the professional at the helm of a construction project is the general contractor. These are usually professionals who work in a clearly defined construction field. For instance, most general contractors are carpenters, masons, bricklayers, or excavators who perform roles as construction superintendents. Most general contractors are responsible for assembling teams that will perform specific tasks in the construction project.
The general contracting team is actually comprised of core employees who perform various tasks that may or may not be directly related to the construction project. General contractors typically maintain personnel for administrative and/or supervisory roles, and then hire sub-contractors, suppliers, and other professionals for specific construction-related tasks. One of the key roles of the general contractor is to manage all of these teams.
One significant difference between general contractors and construction managers is in the way that the work is obtained. Established general contractors are typically assigned the bulk of the negotiated contract, although most general contractors secure the contract through a bidding process. A handful of contractors are usually invited to bid on a specific project, based on a draft put together by a hired architect. The architectural firm is usually responsible for formulating the preliminary budget, structuring and overseeing the bidding process, and supervising the construction work.
All throughout development and bidding, the general contractor will be tasked with fielding proposals from various sub-contractors and suppliers. After the general contractor has selected the teams, the general contractor then formulates a proposal for submission to the project developer.
The winning bid is usually the lowest bid presented, although this isn’t always the case. In some cases, the developer may decide that the next higher bidder is the most appropriate choice and will provide better service for the money, despite the higher bid. Owners may also select the winning bid based on previous satisfactory work performance, or preferred working methods.
Once the construction process begins, all communication between the general contractor and the building owner will typically be coursed through the architect. In most such cases, the architect essentially functions as the representative of the building owner, and he is responsible for monitoring the completion of the project. In fact, most general contractors and owners typically have little occasion to communicate directly with one another, and the owner usually isn’t even involved in the selection of the sub-contractors and suppliers used for the project. This is one aspect wherein general contractors are markedly different from construction managers.
The role of the construction manager
As for the construction manager, he usually serves as an agent to the owner, and is solely responsible for nearly all aspects of the construction project. Construction managers are typically responsible for soliciting bids, managing the project, and even accounting. Unlike a general contractor, a construction manager is usually more closely aligned with the building owner. The relationship between a construction manager and a building owner typically results from long years of working together, and the construction manager is essentially entrusted with making decisions on behalf of the owner.
Construction managers do not usually maintain a sizeable pool of employees. Apart from the administrative team–which is assembled by the construction manager–most other members of the team are independent contractors and suppliers. Although this type of arrangement will save the development firm the cost of providing employee benefits, the downside is reduced control over the construction process, which in turn results from the absences of close ties with the construction team.
Construction managers are not usually involved in a bidding process. Most construction managers instead work for a percentage above the project’s direct cost and work directly with sub-contractors, suppliers, and on occasion, even with general contractors. The construction manager is always focused on saving money on the project, and is responsible for releasing contracts and purchase orders.
Although it would seem that construction managers help save the owner the cost of the markup levied by general contractors on sub-contractors and suppliers, this isn’t necessarily the case. Because construction managers and general contractors are usually paid the same amount–and the sub contractor and supplier fees will have to be tacked onto the construction manager fee–owners do not usually save money by hiring a construction manager. Nevertheless, hiring a construction manager instead of a general contractor is a usually a more cost-effective option for larger volume construction projects.
The bottom line
In essence, the key differences between construction managers and general contractors have more to do with structuring administrative duties and fostering employee relationships than anything to do with the actual construction work. In fact, most construction projects in a given location will probably use the same mason and electrician, regardless of whether or not the owner opts to hire a general contractor or a construction manager. In most cases, the owner’s decision to go with a construction manager or a general contractor is down to previous work relationships and performance than anything else.