General Contractors and Construction Managers are often involved in successful construction projects. With similar titles, it can be difficult to discern the differences between these two professionals. While they share some similarities, there are a number of nuances that differentiate the two. Deciding which professional you should include in your construction project – or if you should include both of them – will depend deeply on your project’s budget and your needs as a project owner.
Both General Contractors and Construction Managers oversee aspects of a construction project, as well as manage the project’s accounting; however, this is where their similarities end. Often referred to as “GCs,” General Contractors specialize in managing a construction project. While General Contractors can be an individual person, they are more often business or corporate entities. A General Contractor does not join a project until after the design phase is complete – that is to say, when the architectural and engineering plans have been finalized. General Contractors are responsible for supervising and managing the entire construction phase of a project, overseeing every aspect from beginning to end. It is important to note that some General Contractors specialize in a particular area of construction: you may encounter a General Contractor who focuses in masonry or foundation laying, for example.
When a General Contractor joins a project, they bring a network of construction professionals with them (e.g. carpenters, general laborers, subcontractors, and supervisors). The General Contractor assumes the role of hiring all necessary construction staff; in addition, they negotiate all contracts and salaries. They often have go-to staff that they hire for multiple projects. General Contractors also supervise these professionals throughout the project. Because General Contractors tend to work with the same professionals, they have an efficient and close relationship with their construction staff. Since the General Contractor assumes responsibility for the project’s staff, the project owner is not heavily involved in the project’s day-to-day minutia. Even though the project owner is not always involved with the construction process, the General Contractor is tasked with providing frequent updates to the project owner. The project owner’s relationship with the General Contractor is contractual in nature. The General Contractor spends more time working on site than with the project owner.
In order to hire a General Contractor, a project owner must host a competitive bidding process. The owner of the project will submit their projects’ desired prices and goals. This will attract a variety of General Contractors who will place bids on the project. Each General Contractor will provide separate quotes and services. A General Contractor’s final price may change depending on the scope of the project. If a project goes over budget or takes longer than projected to complete, then the General Contractor will need to be compensated for their additional work. Because of this, some General Contractors become very expensive. In essence, General Contractors may be pricier for a project owner, but they assume ownership of all construction elements, from hiring staff to managing the site, they handle all aspects of the construction process.
Construction Mangers, often simply referred to as “CMs,” operate very differently from General Contractors. They are often an individual or a small team, which typically consists of accountants, project managers, and support staff. Construction Managers are hired on to a project during the pre-design phase. Because Construction Managers involvment starts early on with a project, they can advise the project owner on the realities of cost, suggest environmentally friendly materials, and propose design alternatives. Construction Managers stay with a project owner from the inception of a project through to its final completion. A Construction Manager works alongside the project owner as a fiduciary agent. The Construction Manager quickly learns a project owner’s goals and vision, and they task themselves with bringing this vision to light in the most efficient and cost effective manner.
Construction Managers work alongside the project owner to make decisions during the construction phase. The Construction Manager oversees the bid solicitation process, providing advice to the project owner regarding the best staff choices for the project. In some cases, a Construction Manager may oversee the bid solicitation of a General Contractor, though this usually only occurs on very large scale construction projects.
All construction staff are supervised by the Construction Manager – similarly to how the General Contractor operates – except their relationship with the staff is different. A Construction Manager hires the best bids for the project – they do not always hire staff based on previous relationships. The Construction Manager also handles all of the accounting for the project.
Construction Managers are hired onto a project based on a pre-determined fee: their price will not change no matter what the project’s final costs may be. Regardless if a project goes over budget or under budget, the Construction Manager will be paid the same price in the end. A Construction Manager’s goal is to keep the project under budget and ahead of schedule as much as possible. Construction Managers can be beneficial to a project because they are present for the project’s entire lifespan. A Construction Manager will require more active participation on behalf of the project owner, but they are also a more affordable project manager.
In summary, below are the main differences between General Contractors and Construction Managers:
|General Contractor||Construction Manager|
|How they’re hired||Hired through bidding||Hired through qualifications|
|Ultimate cost||Final price fluctuates||Pre-determined price|
|Involvement in project||Construction phase only||Works on entire project|
|How they hire staff||Brings a network of staff||Hires staff as necessary|
|Relationship to owner||Contractual relationship||Fiduciary partnership|
|Size of business||Larger business entities||Smaller teams/individual|
So, Which Should I Hire?
Deciding whether to hire a General Contractor or a Construction Manager depends on a project owner’s needs. It is not uncommon for both General Contractors and Construction Managers to work on a single project, though this is typically only common for projects that are much larger in scale. When deciding which to work with, there are numerous factors to consider.
Level of Project Owner Involvement
General Contractors will oversee the construction process on behalf of the project owner; however, they also hire all of the staff – sometimes with little input from the project owner. Conversely, a Construction Manager will host bidding processes in order to hire construction staff, with the project owner providing feedback and voicing their concerns or opinions. Working with a Construction Manager requires more involvement for the project owner, but it also allows for a project owner to have more control over the staff that is working on a project.
While General Contractors can have a network of great professionals working at their side, they also profit more from the project by working on a contract basis. The entire construction process is managed by a single entity, which makes work easier for the project owner. However, it is possible for General Contractors to drive up a project’s budget, which can lead to them securing better financial outcomes for themselves and their associates. A Construction Manager, however, determines their price before the start of a project. They want to work alongside a project owner and see the owner’s vision realized. A Construction Manager does not benefit if a project goes over budget or takes longer than expected to complete. A Construction Manager is hired based upon their qualifications and previous experience, not the fact that they may be the cheapest professional available. Your project budget will inform which managing professional you should hire for your project.
Late-Stage Design Changes
Because General Contractors do not see a project’s design plans until after they are completed, the General Contractor may determine that changes need to be made after the design phase. Unfortunately, this can occur late in the construction phase, which can cause expensive changes to the design plans. Meanwhile, because a Construction Manager is present during the design phase, a Construction Manager can educate a project owner on realistic goals of a design plan, pointing out where the plan may be too expensive, or by providing advice regarding construction materials. A Construction Manager can prevent expensive changes from occurring later during construction.
On Site Vs. Off Site
It is important to note that often times, Construction Mangers are not on site as often as General Contractors are. General Contractors manage a site directly, whereas Construction Managers will visit a site periodically, but they may not be present on site every single day. However, this is because a Construction Manager will spend more time working alongside the project owner. The General Contractor, however, does not work alongside a project owner, but rather, they work for them. They will be more involved on site but less involved in your office.
It can be appropriate to hire both professionals for a project. This is not common with smaller scale projects, however. General Contractors have more resources available to them, due to their large network of construction professionals. They assume most of the project’s managerial work. Conversely, Construction Managers may take longer securing the right staff for your project. However, they will include you, the project owner, in more of the project’s decision making. Ultimately, deciding on which professional to hire depends on your personal preferences and the needs of your construction project.