Construction management vs. general constractor

Construction management vs. general constractor

When you start your next construction project, you may find yourself wondering, “Should I hire a Construction Manager (CM) or a General Contractor (GC)?” Although many GC’s will also serve as CM’s, they differ in their corporate structures, level of cooperation with owners, and in their starting project points.

As more and more commercial and residential properties are being developed or rebuilt under Construction Management in the United States, Construction Management is becoming an increasingly important topic to understand in this industry. Let us discuss the benefits and role of a Construction Manager and challenges related to the traditional General Construction approach.

Benefits and Role of a Construction Management:

  • The role of a Construction Manager is to represent and protect the owner’s interests throughout the entire project, from design to completion.
  • All decisions relative to the building program are made with the benefit of input from both a Construction Manager and an architect, providing a system of checks and balances that would otherwise not be present.
  • By engaging a Construction Manager early on in a project challenges can be identified and addressed to avoid serious cost and delay implications.
  • Common goals and milestones can be developed with the owners and architects in advance of the subcontractor agreements
  • The Construction Manager’s fees take the place of the general contractor’s multiple markup and fees associated with the traditional approach.
  • Through creative value engineering and cost estimating, a construction management firm should be able to generate significant cost savings, which can be applied to other portions of the project.
  • The Construction Manager’s input should help reduce claims, minimize change orders, give an opportunity the client introduce subcontractors to be hired. It also allows them to participate in a buy out process, share potential savings and control the schedule, resulting in a smooth running project with effective cost and schedule control.

Challenges with the Traditional General Contracting Approach

  • A low bid contractor takes tremendous risk when submitting a lump sum number.
  • Contractors may become more concerned with the lump sum contract than with the well being of the project, leading to inconsistent project goals and an adversarial relationship between the owner, architect and the subcontractors.
  • When the General Contractor submits the lowest bid it may not always be sufficiently experienced to meet the demands of construction. Since the General Contractor is chosen by a low bid, the owner has no control over how company manages their project.
  • The owner or architect does not benefit from construction expertise during the design phase when the opportunity for cost savings and schedule enhancements are the greatest.
  • Assurance, that the owner is being treated fairly by the contractors in terms of quality, cost issues and conformity to the plans and specifications.

So, Which One is to Choose for You?

The answer to the “CM versus GC debate” usually comes down to how you prefer to work. Hiring a qualified architect who designs a project and then biding it out to a few GC’s is the most conventional process nowadays, but also the most expensive because the client does not get the benefit of insights from the CM during the design process.

Having the CM as part of the initial design stage of the project helps the owner get a better understanding of the construction cost, ongoing operational needs of the facility, as well as the functional implications of the facility. Choosing the CM approach is the clear choice for reducing cost, managing construction timelines, and increased collaboration with the client.

To clarify additional questions, send a request to Construction Guide team.

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