General Contractor Vs. Construction Manager – A Complete Guide

General Contractor Vs. Construction Manager - A Complete Guide

Are you planning to hire someone to construct your dream home but unsure whether you should go with a general contractor or a construction manager? If so, don’t worry–you’re not alone. Many people are confused about the difference between these two job titles. While they may sound similar, there are actually quite a few key differences between CMs and GCs. So which one is better for you? It all depends on your individual needs and project requirements.

If you’re undecided about which route to take, this article will provide answers to help make your decision easier. We’ll discuss the basics of each role – what each position entails – then dive into the pros and cons of both options. By the end, you should have a good understanding of which path is best suited for you. Let’s break it down for you!

What Is a General Contractor (GCs)?

The General Contractor, typically an individual or company, is responsible for managing the day-to-day activities at the job site. They lead and oversee the entire building process. Usually, they have their own employees who work as project managers or foremen with laborers. There are also times when they use a variety of specialty subcontractors to help get the job done right.

The typical big commercial project generally has different subcontractors that do most of the work (80-90%). The General Contractor’s responsibilities are to manage the project by coordinating all activities done by subcontractors and maintaining communication with either the owner or architect about the project’s progress.

What Is a Construction Manager (CMs)?

A construction manager is someone who manages the process of construction, but they don’t do any of the work themselves. They act as a point person between the homeowner and all of the different subcontracted workers. Some key duties for a construction manager are creating schedules and budgets, getting approvals from lenders (if needed), acquiring permits, and sending progress reports to clients throughout the construction phase.

Construction managers typically only take on one project at a time so that they can give it their full attention – unlike general contractors who often have multiple projects underway simultaneously

What Is the Difference Between General Contractor and Construction Manager?

Both parties seek to fulfill the project owner’s vision by bringing the concept to life (and what regulations demand). Each of these parties performs its function slightly differently and has its own distinct financial setup and obligations that inform how it approaches the secure and efficient completion of a building project of any scale. Here are some key differences between GCs and CMs.

Man Power

A typical GC employs its own workforce, which generally includes foremen or superintendents who work at the job site and general laborers, carpenters, or other skilled trades. Additionally, most GCs have a network of trusted subcontractors from past projects.

On the other hand, a CM might only be a single entity but could also be multiple people working together as a team. One of the more significant differences is that tradespeople who actually do construction work are not often part of a CM’s staff.

Budget – CMs More Economical Than GCs

Many owners work with construction managers using a “two-stage” or “progressive contracting” model, which is especially helpful when the project’s scope is unclear. In the first stage, both parties agree on how much the construction manager will be paid for their services during pre-construction.

They can estimate mark-ups during this time but refrain from finalizing costs until later, once the project’s parameters become more defined. This system allows greater flexibility and avoids potential disagreements down the line.

This way, work can continue with less risk and cost to the owner and without delaying the start of the project. It also shares responsibility for administering project contingencies among all parties involved and ensures that any savings will go back to the owner instead of the contractors.

Relationship With Owner

General contractors (GCs) and construction managers (CMs) have different relationships with their owners.

Relationship of GCs With Owner

The relationships between general contractors, architects, and project owners can sometimes be tense. A contractor’s financial incentives may mean that they make decisions that reduce the contractor’s profit margin, which can put them at odds with other stakeholders.

However, these concerns may be overcome by the great degree of financial responsibility for the project that the general contractor takes on or their skilled experience in relation to similar projects.

Relationship of CMs With Owner

A construction manager’s relationship with the owner is typically closer than that of a general contractor’s, and they are commonly viewed as an extension of the owner’s team instead of an independent contractor.

In contrast to general contractors, construction managers are not incentivized by the project’s budget. Instead, they are paid a fee by the owner. Compared to projects that employ a general contractor system in which bids are provided, this structure typically results in less conflict between owners and construction managers.

GCs Might Act As CMs

It’s not unusual for a general contractor to act as a project manager on certain occasions for some owners. In these cases, the GC might have already completed numerous projects successfully for the owner and established a trusting rapport.

So, when it comes time to tackle another venture, the owner may request that the same GC manage their new project. The reasoning behind this decision usually has less to do with finances and more with personal comfort levels and preferences regarding how that individual builds things.

Credentials for GCs and CMs

Construction managers typically don’t have many experienced, trusted subcontractors to fall back on like general contractors. This is because they usually only enter the field with a handful of years of experience. Most construction managers have to earn their bachelor’s or master’s degrees in construction management before beginning work in the field.

Formal education, such as college degrees, is now commonplace for general contractors, yet, many experts still see experience and on-the-job training as the best way to learn success in this field. In fact, plenty of successful general contractors today only have a high school diploma or certificate. They got to where they are through hard work and steadily moving up the construction company ladder.

Which One Is Best for Your Construction Job?

If any of the following are true, a construction manager may be right for your project:

  • The owner prefers a more interactive collaboration, including manager participation in the design process.
  • The owner prefers not to go through the standard procedure of soliciting bids from general contractors.
  • The proprietor favors a one-time, fixed payment.

Below are a few reasons why hiring a general contractor may be the right decision for your next project:

  • Traditional construction bidding is the owner’s first choice.
  • The owner is too busy to maintain a strong relationship with the team in charge of each project.
  • The owner would like it if the contractor were to be fully responsible for their subcontractors’ work.
  • The owner is interested in hiring someone who has established relationships with reliable service providers in the area.

In rare cases, in addition to hiring a general contractor, it may be necessary to appoint a construction manager to oversee the work of the contractor. The particular positions might change as the project develops, but there are often distinctions in compensation and level of involvement with project ownership.

Valet Works –  A Name of Trust in the List of 8a Contractors

At Valet Works, we specialize in commercial and residential design and construction projects. Our team of experienced professionals has a wide range of expertise, from general contracting to construction management to consulting analysis. So you can always count on us to deliver amazing results within your budget. Valet Works should be your first choice for 8(a) construction needs! We always aim to deliver high-quality results and great customer service. Contact us today to see how we can help make your next project successful.

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