Construction projects are notoriously difficult. There are many different trades and professional disciplines required to work together to erect whatever structure is being made. To have this work there needs to be one person responsible for orchestrating all these different parts. That’s what a general contractor is in construction project management.
You’ve heard the term, general contractor, but let’s first define what a general contractor is, what the general contractor license is and detail what a general contractor does. There’s also more than one type of general contractor, so we’ll explain that as well, plus show the average salary for a general contractor and why it’s important to have one for your construction project.
What Is a General Contractor?
A general contractor (GC) is a construction professional who provides all the services that a project owner needs to deliver the project successfully. A general contractor can be an individual or a company, but either way they’re the one who manages the day-to-day operations at the job site. They build the building.
While the general contractor will usually have a project manager, construction superintendent and even their own laborers and carpenters working under them, they also almost always hire subcontractors to do the majority of the work. In that capacity, the general contractor is sort of the project manager to those subcontractors and bridges the communications between them and the project owner, architect and engineer.
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In terms of payment, general contractors tend to work with the project owner under a lump sum or stipulated sum contract. Therefore, the general contractor will be invited to bid on the job by the project owner. This process includes the general contractor reviewing and analyzing the drawings, scope of work and requirements of the project. They will collect their own quotes from subcontractors, add their overhead costs and submit a quote to the project owner.
If the owner accepts the bid, the general contractor is contracted to deliver the project as agreed for the price quoted. Therefore, any savings is more profit for the general contractor. Project management software can help run the project more efficiently. ProjectManager is award-winning project management software that helps general contractors plan, manage and track their work in real time. Using our powerful Gantt charts allows general contractors to link all four types of task dependencies to avoid costly delays and filter for the critical path to identify only essential tasks. Once they set a baseline, they can compare the planned effort against the actual effort to help keep the project on track and delivered on time and under budget. Get started with ProjectManager today for free.
What Is a General Contractor License?
Each state has a different set of requirements to get a general contractor license. Those rules are set up by the Department of Consumer Affairs and its Contractors State License Board (CSLB). In general, requirements are four years of experience in the construction trade, being 18 years or older, though a college degree can shave off a few years of required experience.
Using a licensed general contractor is one way a project owner can safeguard their property and project. It shows that the general contractor has experience and many states require general contractors to pass a test that proves they have a deep knowledge of different construction trades. A general contractor license usually means they have liability insurance, lien rights and proof of a business address.
What Does a General Contractor Do?
As noted above, general contractors are responsible for the successful completion of the project. This means they oversee everything and, therefore, should have an understanding of all the tasks that deliver that project and the ability to manage those pieces of work so they come together as needed. Let’s take a closer look at the responsibilities of a general contractor.
Bid on Projects
Before the project is in a general contractor’s hands they have to bid on it. The project owner will send out a request for proposal (RFP), request for quote (RFQ) or an invitation to bid (ITB) package. This can be sent to a specific general contractor or open to all. The bidding process is broken down into five key steps: bid solicitation, bid submission, bid selection, contract formation and project delivery.
Comply with Contracts, General Conditions & General Requirements
The general contractor works with subcontractors to handle various specialties necessary to complete the project. These relationships are legally bound by contracts, which are the general contractor’s responsibility. They are also responsible for general conditions, which is how the general contractor fulfills the listed requirements and how much they’ll cost. General requirements are what the project owner needs the general contractor to provide on the project.
Hire Construction Subcontractors
As mentioned earlier, the general contractor is supervising the whole construction project. The subcontractors are doing the specific job, such as carpentry, bricklaying, roofing, etc. These specialty trades are often required to be licensed and the general contractor must hire and contract with these subcontractors, ensuring that they’re up to the standards expected by the project owner and that they’re doing the job as contracted.
Managing Construction Work at the Job Site
The general contractor is also responsible for overseeing the job site. That means they coordinate the day-to-day activities and manage the subcontractors and the workforce scheduling. They can also be tasked with ordering materials and making sure they arrive at the job site when needed. The general contractor will also monitor work to make sure that it’s compliant with building codes and safety regulations.
Types of General Contractors
While there are several different types of contractor licenses, the most common is that general contractors are divided into two categories: commercial and residential. Let’s take a look at both of these professionals and how they differ and how they are similar.
Commercial General Contractor
A commercial general contractor specializes in commercial construction, but also works on builds and remodels of schools, corporate offices, restaurants, retail buildings and more. They oversee all stages of construction from design, permitting and supply purchases to building code adherence and zoning regulations.
Residential General Contractor
Residential general contractors work on renovating or constructing residential buildings. They’ll work with clients, architects, engineers and subcontractors to deliver a project on time, on budget and to the client’s specifications. Some types of residential construction include single-family houses, townhouses, duplexes and triplexes, condos, etc. They are responsible for obtaining permits, sourcing materials, hiring and supervising subcontractors, managing the construction schedule and ensuring compliance with building codes and safety regulations.
A commercial general contractor will be familiar with different materials than a residential general contractor. There are also differences in code and compliance requirements. There are insurance and warranties that can differ according to the size of the project.
General Contractor Salary
The range of salary a general contractor can expect ranges due to geography, experience and other variables. In the U.S., generally speaking, they can expect to make a salary of between $12,955 to $339,343 annually. That’s a wide spectrum, but the median salary is $62,328.
Contractor Estimate Template
This free contractor estimate template allows you to log all the different costs of a construction project such as labor, materials equipment rentals and more. It helps contractors create accurate project estimates so that they can win more construction bids and maximize their profitability.
We offer a variety of free construction project management templates for Excel you can use to manage all aspects of your project.
Benefits of Hiring a General Contractor
There are many reasons to hire a general contractor, especially one who is licensed. First, they will handle the oversight of the project, which is a time-consuming and complicated process. Without an expert at the helm of such projects, whether residential or commercial, it’s likely the project will take longer and cost more.
General contractors have working relationships with subcontractors and can vouch for their work, which is something that otherwise would take a lot of time to research and one might have to learn by bad experience. None of that is usually within the scope of what a project owner is interested in doing. They have more important responsibilities.
Having a licensed general contractor is ideal because it provides the project owner with protection against lawsuits if something goes wrong on the job site. Licensed general contractors have liability insurance and other coverage that protects workers and owners alike. Plus, they will go through the proper channels in terms of legally getting permits and other code and building regulations that make the work safer, better and more environmentally sound.
General Contractor vs. Construction Manager
General contractors and construction managers have similar responsibilities. They both are tasked with delivering the construction project. But they are not interchangeable positions. As we’ve noted, the general contractor is hired by the owner after a design has been approved and the project is put up to bid. Usually, the low bidder gets the job.
Construction managers are brought on earlier in the project. They are part of the construction management process, which services contracts with the project owner for a fixed fee as opposed to the lump sum a general contractor charges to cover their overhead and profit.
When deciding which is the right choice, it depends on what a project owner wants. General contractors have an incentive to enhance or protect their profit margin, while construction managers are working as an extension of the project owner’s staff and their interests are aligned fully with the owner.
ProjectManager Is the Perfect Tool for General Contractors
Whether you’re a general contractor or a construction manager, you’re going to need construction project management software to deliver the project. ProjectManager is award-winning construction project management software that helps you manage one or more projects with real-time data to make more insightful decisions. Our tool lets you monitor progress and performance while tracking costs and keeping your crew on the job site working at capacity to stay productive.
Monitor Multiple Projects With Real-time Dashboards
General contractors need to get an overview of the project or multiple projects whenever they want them. They can do just that on our software by toggling over the real-time dashboard. It captures live data and displays it in easy-to-read graphs and charts that track such project metrics as planned vs. actual cost, time and much more. There’s even a portfolio dashboard if you’re managing more than one project. Unlike lightweight tools, our dashboard requires no time-consuming setup. It’s ready when you want it.
Track Labor Costs With Workload Charts & Timesheets
Managing resources is complicated and vital to the success of a construction project. General contractors can stay on top of their resources with our tool. First, they can set the availability of their crew, including PTO, vacations and even global holidays, which makes assigning easier. A color-coded workload chart shows at a glance who is overallocated and resources can be balanced right from that chart to keep everyone working at capacity. We also have secure timesheets to streamline payroll and track the amount of time your crew is spending on their tasks. That’s just another way to make sure you’re keeping to the schedule and budget.
Our software also has task management tools, multiple project views that allow teams to use task lists, kanban boards and more, plus risk management features to identify and track issues until they’re resolved. Use recurring tasks and automated workflows to streamline processes and task approval settings to ensure only quality is delivered. General contractors will have all the tools they need to deliver successful projects.
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ProjectManager is online construction project management software that empowers general contractors to plan, manage and track their projects in real time. Crews on the job site can collaborate with architects and engineers in the office, sharing files and commenting at the task level. Get started with ProjectManager today for free.
