The term construction manager has been growing in popularity and use over the last couple years. As a result, we’ve been asked on many occasions to help clarify the difference between it and another commonly used term – general contractor. Below, we’ve tried to explain what sets them apart from each other, as well as the pros and cons of each. To conclude, we’ve also included information on a third delivery system that is a blending of both.
What is a General Contractor?
A General Contractor is responsible for the day-to-day management and coordination of a construction project, and typically employs its own field employees that perform a portion of the work on a given project. They utilize trusted subcontractors to complete work not performed in-house.
General contractors are often hired by a Client through a competitive bidding process, coordinated by the Client’s architect or design consultants. Bidders are provided construction documents from which they formulate a price to complete the work as shown. Typically, the lowest bidder is selected to complete the work, and a contract is developed based upon the bid amount provided. The general contractor’s fee to complete the work is integrated in their bid amount.
In this scenario, because the general contractor is not involved in pre-construction to provide input into cost and constructability, the lowest bid may be higher than the anticipated budget set forth by the Client. This can result in a trip back to the drawing board; or a project that costs more than planned.
During construction, a general contractor is directly responsible for jobsite safety and cleanliness, maintaining project budget and schedule. When utilizing a general contractor, the project schedule is often determined prior to bidding by the Owner and design team without input from a general contractor. General contractors are asked to confirm their ability to meet the specified project schedule within their bid. While this has pros and cons, it can be helpful if a project has a hard deadline for completion.
What is a Construction Manager?
A Construction manager is engaged earlier in the process, and works on behalf of the Owner, overseeing construction projects from start to finish. Construction managers serve as design team members and provide critical information regarding cost and constructability to help keep the project on budget. They provide input and are ultimately responsible for maintaining the project schedule as well. Having a construction manager involved throughout the pre-construction phases of a project ensures questions get answered quickly, and the concern of being over budget at bid time is greatly diminished.
Construction Managers assist in the bidding process by working with the design team to establish bid packages for the various project components, however, they do not self-perform any work. The owner then has contracts with each of the individual (prime) contractors completing portions of the work and the construction manager is responsible for project management and contract oversight. Unlike general contractors, construction managers are paid a professional fee for the service they provide, based on the total cost of the project.
Construction managers provide day-to-day onsite administration throughout construction. They coordinate regularly scheduled jobsite meetings to communicate with prime contractors on the project, and to review schedule and budget. They serve as an advisor to the Client regarding any changes or issues that arise during construction and make recommendations regarding prime contract changes.
Is there any middle ground between a General Contractor and Construction Manager?
A Construction Manager (at Risk), or negotiated General Contractor, provides another solution for Clients that want the self-performance capabilities of a General Contractor, and the pre-construction knowledge and insight of a construction manager.
Typically, when operating in this delivery system, Cardinal will provide a Guaranteed Maximum Price (GMP). A Guaranteed Maximum Price is simply that – an assurance that the Project will not cost more than the agreed upon amount. Further, any savings that result throughout the project accrue to the Client as well. This can be done successfully when the Construction Manager at Risk works closely with the design team through pre-construction to ensure no major scope changes occur between design and bidding.
Construction Managers at Risk assist with the bidding process, working with the design team to bid portions of work not self-performed. In most cases, Cardinal will supply a bid amount for self-performed work as well. Occasionally, we may not be the low bidder and want to provide the Client with the best pricing available.
Construction Managers at Risk are responsible for day-to-day onsite project management, and all aforementioned items like safety, budget and schedule. Because Construction Managers at Risk contract directly with Subcontractors completing work, they can be more effective at ensuring budget and scheduling goals are maintained.
Cardinal Construction is capable and willing to work in all capacities, depending on what serves our Clients unique desires and goals. For more information on these delivery systems, please visit the “Services” page of our website. To speak to one of our construction specialists, please click here.
