Newsletter Volume 160

 

AT A GLANCE:

 

GC v. CM?

Have You Heard?

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Have you heard...?

 

Recent statistics indicate that in addition to fretting over finding work, construction companies are increasingly worried about finding enough skilled workers.

The U.S. Labor Department projects that demand nationwide for all those categories, except for carpenters, will grow considerably faster over the next decade than the pace of overall job growth.

 

 

 

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Case Study

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Safety First!
OSHA's "Fatal 4" hazzards...

 

 
 

How does a General Contractor Differ from a Construction Manager?

 

General Contractors (GC) or Construction Managers (CM) are some of the most important professionals in any construction project, although it can be quite confusing to pinpoint the differences between them. In many areas the roles of both types of professionals overlap. Frequently, general contractors perform roles similar to that typically assigned to a construction manager, such as hiring sub-contractors instead of using their own staff. Nonetheless, general contractors and construction managers play distinct roles in the construction industry and there are a number of areas which clearly set them apart from each other.

The general contractor is responsible for the day-to-day management and coordination of a construction project. GCs are typically hired on by the client through a bidding process after a complete set of drawings and specifications have been prepared by the clients consultants, namely the architect and engineers.

The role of a general contractor in most cases is the professional at the helm of a construction project. They usually work in clearly defined areas of construction such as carpentry, masonry or excavating. Most general contractors are responsible for assembling teams that will perform specific tasks on the construction project.

The general contractor typically maintains personnel for administrative and/or supervisory roles; hiring sub-contractors, suppliers and other professionals for specific construction related tasks. The primary role of the general contractor is to manage all of the team members for scheduling and project quality. Should the GC expend less than its bid, then the GC will profit on the difference. This tends to foster a competitive relationship with the owner.

Once the construction process begins, all communications between the general contractor and the building owner will typically be funneled through an architect, who is the owners representative and decision maker.

The construction manager usually serves as an agent to the owner and is solely responsible for nearly all aspects of the construction project. Unlike a GC, a CM is usually more closely aligned with the building owner. The CM becomes involved in the process during the pre-construction phase and continues to work on behalf of the owner by overseeing the construction project from start to finish. By involving a CM early in the development process, the design team is capable of making more informed decisions and the construction team is capable of deriving more precise estimates. The collaboration between the client, CM, architect and engineers results in a better-informed and more efficient project process and further strengthens relationships.

CMs are not usually involved in a bidding process, as typically the owner awards the contract to a CM based on a fee and general conditions cost. The hiring process for CMs is centered more on qualifications and trust rather than cost. CMs are essentially entrusted with making decision on behalf of the owner.

The conventional owner-wisdom is that the mark-up taken by the GC on sub-contractors and suppliers is avoided through the use of the CM, but in actual practice, this likely isnt the case. The net cost to the owner above and beyond the actual direct project cost would need to be considered to properly compare the two. If the CMs overall fee is the same as the GCs profit plus overhead, which includes the sub-contractor and supplier mark-ups, there will be little saved by going with the CM.

In conclusion, 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 most cases, the deciding reasons to go with a construction manager or a general contractor are due to: 1) previous work relationships, 2) project schedule and 3) performance.

 
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