General Contractors

A Group or Individual that Contracts with Others for Construction


A general contractor is a group or individual that contracts with another organization or individual (the owner) for the construction, renovation or demolition of a building, road or other structure. A general contractor is defined as such if it is the signatory as the builder of the prime construction contract for the project.

A general contractor is responsible for the means and methods to be used in the construction execution of the project in accordance with the contract documents. Said contract documents usually include the contract agreement including budget, the general and special conditions and the plans and specification of the project that are prepared by a design professional such as an architect.

A general contractor usually is responsible for the supplying of all material, labor, equipment, (engineering vehicles and tools) and services necessary for the construction of the project. To do this it is common for the general contractor to subcontract part of the work to other persons and companies that specialize in these types of work. These are called subcontractors.

General contractors conducting work for government agencies are typically referred to as prime contractors. The responsibilities of a prime contractors working under a contract are essentially identical to those outlined above. In many cases, prime contractors will delegate portions of the contract work to subcontractors. As a rule, general contractors will provide direct labor for civil aspects of a construction project, such as placement of concrete, carpentry, etc.- with specialty areas, such as mechanical and electrical construction furnished by specialty subcontractors. However, there are instances in certain types of projects, e.g., major pipelines, electrical utility lines, etc., where the preponderance of the work lies within one of these specialties (or some other specialized aspect). Here, the mechanical or electrical contractor, with the majority of the workload, can operate as a "prime" contractor, with the "general" contractor providing services with subcontractor status, and dealing with the owner/owner's representative via the prime contractor

In the United Kingdom and certain former British Commonwealth countries the term 'general contractor' was gradually superseded by 'main contractor' during the early twentieth century. This followed the practice of major professional, trade and consumer organisations issuing standard forms of contract for undertaking the variety of construction works spanning the whole spectrum of the industry. It was and is usual for the term main contractor to be used and defined in all these contract documents, and as a result the term general contractor became an anachronism.[1] There are no set educational requirements to become a general contractor, although most employers do prefer that you have a bachelor's degree. Some general contractors obtain bachelor's degrees in construction science, building science, surveying, construction safety etc.

At the same time however someone who went straight into being a general contractor has more experience then one who went to school for four years to learn what this person had been doing all that time. This aspect of manual labor helps level the playing field between those who are and are not educated in the arts of the general contractor.

General contractors usually start out as regular construction workers. While gaining work experience, they learn about different aspects of construction, including masonry, carpentry, framing and plumbing. Aspiring general contractors network with subcontractors and may learn the management skills they need to run their own company.

Every state requires that general contractors pass an exam to obtain a license, but requirements vary. States typically don't require a bachelor's degree for licensing. However, most states mandate that applicants pass a written test on topics such as contracting and construction law. Some states require candidates to prove they have the financing to own a general contracting firm. States may also demand experience in the construction industry and references from customers, business partners or former employers.

General contractors often run their own business. They hire subcontractors to complete specialized construction work and may manage a team of plumbers, electricians, builders, carpenters and other specialists. General contractors build their business by networking with potential clients, buying basic construction tools and ensuring that their subcontractors complete high-quality work. General contractors don't usually complete much construction work themselves, but they should remain familiar with construction techniques so they can manage workers effectively.

Because general contractors are usually at the top of the employment line the only benefits are the ones that they buy themselves however if you work under a company name you can typically get heath insurance. Being that their jobs vary in complexity they get paid by the job. This means that the harder and more time consuming a job is the more it will cost. Also some materials cost more then others therefore tiling a bathroom will cost more then putting siding on a house.

Before starting a job the general contractor must first come in and look the house to see what it is that they are doing. After observing the area in which the job will be done they are able to come up with a price. This price is called an estimate. The estimation is essentially an educated guess. The general contractor takes what the cost of materials should be and then adds the cost of labor for the job and comes up with the estimate. There are many advantages and disadvantages in being a general contractor. One of the biggest advantages is being your own boss, as a contractor you are not required to accept work from a client. You have the freedom to pick and choose your contracts. Also you have a great work variation; contractors normally take short term contracts of 3, 6 or 12 months in duration. By taking short term contracts you will gain a wealth of experience, and therefore be able to take on a bigger variety of jobs.

While there are many advantages there are also some disadvantages of being a general contractor. If you own your own business which is common in general contracting then you must supply yourself and your employees with some sort of heath benefits. In addition to that you also canít take any paid vacation because you get paid at the end of a job which leads to another problem which is not getting paid. Luckily if someone doesnít pay you can take out a contractors lean on the house and you will get paid when they sell their house.

As a service

Most contractors are required to be licensed in every state and may be required to take an oral and written exam. License requirements and coverage vary by state, and may cover those who contract, bid, negotiate a price or offer to construct, supervise, oversee, direct, alter, repair, install, improve, move, demolish, furnishing labor, etc. Various types of contractor include building (residential and commercial), electrical, plumbing, mechanical, highway, and environmental remediation.

As an owner

Occasionally the entity commissioning the construction of the building chooses to act as the general contractor. In such cases, they work directly with the subcontractors and take care of the administration and organization of the various subcontractors.

Under these conditions the owner takes on all liability for proper sequencing of the work, and dealing with the realities of construction.

Owners considering this approach should keep in mind that general contractors make a living working with known subcontractors. An established General Contractor will have established relationships that will outlast one construction project, and the subcontractors will acknowledge this with their cooperation. Owners seldom have this advantage, and most subcontractors will recognize the risk of working with a one time client with higher bids.

As an alternative, Owner Builder approach to building its own residence can have risks and benefits. As a novice in the business Owner Builder is open to a number of common mistakes as overbuilding for the neighborhood, exposing to liabilities, lack of subcontractor management skills, and others. But with businesslike full time approach to the project saving benefits can be substantial. Owner builder will care more and know better his own project than any General Contractor who often manages many projects on a tight schedule. Subcontractor loyalty and discounted prices to General Contractor are not a rule at all. As economy worsens, and many builders struggle to find work, Owner Builder can pick the best talent at the price that is only limited to his (her) negotiating skills.

As a business owner

For legal reasons it can be easier to hire and also release a contractor compared to an employee that has Permanent employment. Large numbers of business owners choose to hire contractors because of uncertainty within their business or have constraints such as maternity, illness or other legal factors which entail that hiring a permanent employee is not a feasible option. [2]

General contractor example

An owner or real estate developer would develop a program of their needs and select a site (often with an architect). The Architect assembles a design team of consulting engineers and other experts to design the building and specify the building systems to meet those needs. Today contractors frequently participate in the design team effort by providing pre-design services where they will help in providing more accurate estimation of budget and scheduling during design to improve the over all economy of the project. Otherwise the general contractor is hired just to build the building(s) at the close of the design phase. The owner, architect, and general contractor work closely together to meet deadlines and budget. The general contractor then works with subcontractors to ensure quality standards in addition to timeline and budget. Often there will be disagreements between the contractor and the architect over style vs. function. These arguments may lead to lawsuits which can potentially prolong or even stop a project.

See also

  • Construction bidding
  • Performance bond

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