GCs oversee the construction of large-scale projects. Their job involves a lot of planning, coordinating with various people on the project site, and taking care of paperwork like material bills and payrolls.
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In a project-driven world, where schedules change often and unexpected issues arise, having a person in charge who can keep everyone on track for both the timeline and budget is a critical component to success. This is a major responsibility for a general contractor.
A GC will create a comprehensive construction plan for the project and provide detailed milestones with associated timelines. The GC will also work with their client to make sure the plan is in line with the goals and vision for the project.
GCs will also use their experience to review the scope of the project and determine what subcontractors or specialty contractors are needed to perform the required tasks on the project. They will then create a list of these specialists and ask for quotes. This allows the GC to ensure that they are getting the best value for their money while making sure that all of the required work will be done in a timely manner.
Some projects require that the GC obtain building permits and arrange for city inspections, which can be time-consuming and frustrating to navigate without the right knowledge or contacts. An experienced GC will know how to navigate the permit process and will coordinate with the local city inspectors on behalf of their clients.
For residential construction projects, the GC will typically assume a managerial role while using subcontractors to complete the necessary labor. They will take the lead in preparing and bidding on a hard bid contract and will evaluate the risk inherent in the project, weigh the risk/reward, and decide what mark-up they need to turn a profit.
The GC will also be responsible for managing payment between all of the various tiers of contractors and suppliers on the construction site. This can be a complicated process that requires a lot of attention to detail and good communication between the GC, the project manager and the subcontractors on the job.
In many states, GCs must be licensed in order to work on public construction projects. This is a safety measure to help make sure that they are following state guidelines for insurance, taxes and more. This helps to protect property owners and ensures that all of the workers on a construction site are paid in a timely manner.
Contract Negotiation
When negotiating contracts, the goal is to create a win-win situation for all parties involved. Unnecessary conflicts can impede the completion of a project on time and within budget. To avoid these conflicts, it’s a good idea to learn contract negotiation strategies. These out-of-the-box techniques can help you reach a solution to difficult construction contract issues.
One key to contract negotiations is to address change orders early on in the process. During the bid process, you can ask the contractors to agree to include a contingency amount of 10% to 15% for changes. This can motivate the contractor to limit the number of changes and reduce costs.
It’s also important to make sure the scope of work is defined clearly. This is often done through the use of the “who, what, when, where, and why” questions. Breaking the scope of work down to these categories can help the contractor understand what is expected from them and provide the clarity necessary for a well-written contract.
Another area to negotiate is the project timeline. It’s essential to agree on a clear time frame for the completion of each phase of the project. Carefully describing milestones and quantifiable goals can also prevent disputes in the future.
Finally, a general contractor should always look for ways to negotiate on insurance, warranties, and bonds. In most states, the contract language varies by state, and it’s important to familiarize yourself with those laws in advance. Having more knowledge of these state requirements can give you leverage during contract negotiations.
It’s also important to research the cost of materials. Many general contractors overcharge for supplies, so it’s best to compare prices from multiple suppliers to find the most affordable options. This can save you a lot of money in the long run, especially when it comes to items like lumber. Keeping a list of these material costs throughout the project can also help you spot any unnecessary purchases. For example, if the contractor keeps buying expensive wood, you can take note and ask them to lower their price. By addressing these issues, you can improve your chances of getting the best possible construction contract for your business.
Subcontractor Management
Subcontractors perform a substantial portion of work on construction projects, so effective management of these key project resources is a critical task for general contractors. The first step in managing subcontractors is establishing clear expectations during the contract negotiation process. This is accomplished by ensuring that the project specifications, payment terms and dispute resolution mechanisms are clearly outlined in the contract. This reduces misunderstandings and ensures that the subcontractor is fully aware of their responsibilities, roles and deliverables on the project.
Once the contract has been negotiated, general contractors must then select and manage qualified subcontractors. This involves evaluating bids with an eagle eye, making sure that all subcontractors are both competitively priced and aligned with the specific project requirements. Throughout the project, general contractors monitor subcontractors to make sure that they’re operating on schedule and meeting quality and safety standards. They also review the results of subcontractor work, requesting – and following up on – change orders as necessary.
Managing subcontractors involves fostering a one team philosophy on the jobsite. This enables project stakeholders to align their unique skillsets toward a common goal. It’s also essential to maintain open lines of communication. Subcontractors often have valuable onsite feedback that can save time and money through avoiding costly rework.
It’s also important to communicate changes to the scope of the project as they occur. This allows subcontractors to adjust their work processes accordingly and avoid unforeseen costs that can wreak havoc on the project budget and timeline.
During the bidding process, it’s important for general contractors to evaluate subcontractor’s financial stability and past performance on similar projects. They should also check to see if there are any red flags that could indicate potential problems in the future, such as lack of insurance coverage or poor track record of timely payments. This is an excellent time to establish a pre-qualification process that can help identify the best subcontractors for the project and mitigate unnecessary risks. This will benefit all parties involved in the long run. In addition, it’s helpful to develop a clear subcontractor management procedure that includes cost control, supervising onsite work, communication expectations and dispute resolution methods.
Site Management
If there are a lot of questions and back-and-forth with project details, the GC can get bogged down on the jobsite. In this case, a CM can help streamline communication and stay on top of progress, so the GC can keep their hands on the work.
Both a GC and construction manager must have extensive knowledge of construction materials, safety practices, and regulations to successfully manage a project. They both have to regularly monitor the project’s work, conduct inspections, and ensure it complies with specifications and standards.
Ultimately, a GC is the one who takes the design and concept from the owner and designer and makes it reality on the jobsite. They take on a higher level of responsibility for the project’s outcomes and have a more significant financial stake in the work than construction managers do. When something goes wrong, they must be ready to step up and resolve it, quickly. It is also vital that a general contractor has a strong history of prioritizing safety. The jobsite can be a dangerous place, and workers are more than twice as likely to die from workplace-related incidents than from any other cause.