GCs manage residential and commercial construction projects, working with clients to realize their visions.
GCs are responsible for navigating a wide variety of project hurdles, including design changes, labor shortages, and material price volatility. They also arrange for city inspections and ensure building codes are met during construction. Contact J&R Construction for professional help.
Project management involves coordinating and controlling physical infrastructure projects, including new constructions as well as repairs and renovations. It also includes planning, scheduling, budgeting and other aspects of a construction project. Project managers can be found working on everything from commercial construction to public works projects, such as roads and bridges. There are several different types of project management, but most share a common goal of ensuring that the construction process is completed on time and within budget.
GCs are usually chosen through a bidding process and are involved in the day-to-day operations of construction sites. They are responsible for hiring subcontractors, such as plumbers and carpenters, for specialized tasks. The GC is also responsible for making sure that the construction meets regulatory requirements. Unlike the CM, GCs are more focused on the brick-and-mortar side of the job and handle the actual work on site.
A GC is often required to obtain a bond before starting the construction of a project. A bond is a guarantee that the GC will complete the work on time and as specified. It is important for the GC to have sufficient funds to pay for labor, materials and any other expenses incurred while doing the work. In addition, the GC must be prepared to pay any penalties or fines levied by government inspectors.
The CM, on the other hand, is more concerned with the planning of the physical job and how it can be done within the confines of the budget. They might work on value engineering, suggesting cost-saving measures that do not compromise quality. They are also responsible for resource allocation, ensuring that the right people and equipment are on-site when needed.
CMs work closely with the client and architect, ensuring that all parties are on the same page. They are also involved in preconstruction activities, such as budgeting and timeline setting. They may use life-cycle costing, performance specifications and systems building techniques to achieve the desired outcome of a project. In the federal government, the Moving Ahead for Progress in the 21st Century Act (MAP-21) Section 1303 authorizes contracting agencies to use the CM/GC project delivery method.
Contract Negotiation
Contracts are a vital component of any project and must be thoroughly reviewed before signing. General contractors draft and review contracts to ensure adherence to building codes, permit specifications, labor regulations, and other critical aspects of project execution. This prevents costly disputes, change orders, and delays later on in the project.
A GC can also help clients avoid costly mistakes through careful budget estimation and billable time tracking. In addition, a GC can negotiate better terms with subcontractors and vendors to save time and money. GCs are familiar with standard contract provisions like payment schedules, payment penalties, warranties, and indemnification requirements.
When preparing for contract negotiation, it is important to clearly define the non-negotiables of your project. This might include adhering to a strict budget or using specific materials. Identifying your non-negotiables empowers you to stand firm while leaving room for constructive compromise.
Preparing for contract negotiation begins with researching current market rates and obtaining multiple bids to understand standard pricing. A GC can help you evaluate each bid to determine which contractor is the best fit for your project based on their technical capabilities, experience, and final price. They can also assist you in value engineering by establishing accurate cost estimates from the onset and finding creative ways to save on costs like adjusting scope or selecting alternative materials.
GCs often hire specialty subcontractors to perform the bulk of the labor on a project. These are skilled professionals such as electricians, plumbers, drywall installers, and carpenters. Depending on the type of construction project, these subcontractors may be required to obtain their own permits and arrange city inspections. GCs coordinate work with the subcontractors to make sure all stages are completed in accordance with the project design and local code.
When drafting a contract, it is important to emphasize reasonable change order procedures and equitable risk allocation. It is also crucial to set clear scopes of work, establish a payment structure, and define mechanisms for addressing unforeseen site conditions. In addition, a GC can provide advice on insurance requirements, indemnification provisions, and liability limitations to protect clients from potential disputes throughout the project.
Subcontractor Management
The ability of a general contractor to effectively manage subcontractors is a major component of their role on a construction project. The coordination and collaboration between subcontractors is critical to ensure that tasks are completed in the proper sequence, preventing overlapping schedules and delays. It also requires the GC to communicate regularly with subcontractors to convey project timelines and expectations, and to resolve any issues that may arise during construction.
The specialized expertise of subcontractors enables them to focus on their specific area of expertise, contributing to the quality of work on a project. They often provide valuable insights and perspectives that can help the GC to avoid costly errors, reduce rework, and complete projects on time. However, a lack of communication between the GC and subcontractors can result in a misalignment of the project schedule, creating confusion and frustration. The GC must carefully balance the need to keep subcontractors up-to-date on the project’s timeline and requirements with their need to manage broader project oversight and milestone achievement.
Managing subcontractors is especially important when dealing with highly specialized trades such as electrical and plumbing, where the smallest error can have significant consequences. In addition, the GC must be mindful of budget constraints, keeping track of each subcontractor’s pricing and ensuring that they do not exceed their contractual allowance.
A good GC will use prequalification and contracting processes to limit the number of new subcontractors hired for each project. High turnover among subcontractors is a red flag and can indicate managerial issues that could have a negative impact on the overall project quality and cost.
Effective GCs will also establish clear quality standards and benchmarks during the planning and contract negotiation phases to align with client expectations. They will then implement regular inspections and monitoring to ensure that subcontractors are maintaining their established standards and complying with project requirements. This “trust but verify” approach maintains a strong relationship with subcontractors and minimizes costly problems throughout the project.
Finally, a good GC will promote a strong safety culture on the jobsite. This is typically managed by the site superintendent, who will ensure that all onsite employees are following proper safety procedures and is aware of any potential risks or concerns.
Budgeting
Managing a construction project is challenging enough, but doing so while keeping costs within budget requires even more finesse. General contractors excel at preventing cost overruns by forecasting accurately and tracking costs consistently. They also know the ins and outs of permit requirements, safety regulations, and other legal issues, which can help to keep projects on track without costly hiccups.
In the case of unforeseen expenses, general contractors can use their expertise to find cost-effective solutions, such as value engineering, which seeks to reduce overall project costs without sacrificing quality or functionality. They can also make recommendations for alternative materials, methods, or design changes that would be more cost-efficient.
Another common issue that can throw off a project is material price inflation, which is often out of the control of all parties involved in the construction process. A good general contractor will know how to mitigate this by negotiating bulk discounts with suppliers or using predictive modeling to anticipate cost changes.
Similarly, a GC is well-equipped to manage equipment and machinery costs, as they have the experience needed to make informed purchasing decisions that maximize return on investment. They also understand the impact of a project’s scope on material procurement and usage, as well as the importance of implementing effective scheduling.
Budgeting in construction is a complex endeavor, and a general contractor’s ability to manage it efficiently will have a profound effect on the success of a project. They must be able to identify all costs associated with the project, including soft costs and site costs. They must also be able to calculate a fair price for each item. They must also be able to negotiate a contract with the client that includes all relevant information, such as payment terms and schedules, project start and completion dates, basic budgeting details, insurance and bonding requirements, and contingency planning.
Lastly, a good general contractor will be able to streamline project financial management processes by using software that enables them to track actual costs in real-time and integrates progress billing with construction workflows. By providing a clear and comprehensive overview of all financial matters, these tools can help to improve communication among project stakeholders and eliminate costly delays. One example is KonstructIQ, which provides seamless integration between budgeting and invoice management to improve efficiency and increase productivity.