What's the Distinction Between General Contracting and Construction Management?

Have you ever wondered what the distinctions between General Contracting and Construction Management are? Here's a review.

There are always a number of essential actors involved in each building project. The owner, architect, general contractor, construction manager, different specialty trades, each with its own project manager, and others are all involved. The ultimately accountable person for the overall project in major commercial projects is either a Construction Manager or a General Contractor. They both share the same goal of completing the project to the owner's satisfaction. However, there are also significant distinctions between the two in terms of organizational structure, project selection, and interaction with the owner.

General Contractor

Typically, the General Contractor is the person or organization in charge of overseeing all aspects of the job site's day-to-day operations. They are in charge of constructing the structure. General contractors have their own workers who often serve the responsibilities of project manager and construction superintendent. A GC may have some of their own laborers and carpenters who "self-perform" some work on the project; however, General Contractors nearly always use a range of specialty subcontractors who execute 80-90 percent of the work. The general contractor acts as project manager, managing the work of subcontractors and acting as a liaison in communicating with the owner or architect about project operations.

General contractors are often hired on a lump sum or stipulated sum basis. In this strategy, the project owner invites the general contractor to bid or quote on the complete project. The general contractor will evaluate and analyze the drawings, scope of work, and project requirements before collecting bids from a number of qualified specialized subcontractors for all work to be done, adding their own overhead expenses, and submitting a quote. The general contractor is then committed to completing the job as agreed for that amount. Any savings made result in greater profit for the GC.

Construction Manager

A General Contractor's and Construction Manager's duties and responsibilities on the job site are essentially the same. The distinction is due to the nature of the connection and the contract's form.

Construction management is a more collaborative partnership than general contracting. As previously stated, in General Contracting, the construction company submits a competitive bid and subsequently completes a project for that price. Any cost reductions are converted into greater profit for the GC. With Construction Management, the construction business advises and develops a budget for the project with the client from the beginning. The owner chooses the alternatives they desire, and the Construction Manager executes the project within the parameters of the budget and at the agreed-upon charge. The cost savings are reinvested in the owner's budget.