Commission a complex major construction project, sit back and watch all the tasks get done efficiently: No problem with general contracting. With a general contractor at your side, all coordination work is taken over, tasks are passed on to subcontractors and the construction is supervised until the keys are handed over. When deciding on a general contractor, it is important to find out exactly what services are offered, what advantages the project takeover offers and what needs to be considered when concluding the contract.
What does General Contracting mean?
General contracting is an association of several parties who coordinate a complex major construction project for a client until the keys are handed over. The general contractor acts as an intermediary between all members involved. It is important that the general contractor procures all the necessary materials, labor, vehicles, tools and services themself. It either commissions subcontractors or performs partial services itself. This creates a well-coordinated coalition of different suppliers who work efficiently under the supervision of the general contractor.
When does it make sense to hire a General Contractor?
General contracting is particularly attractive for contractors who are planning a large project but have little experience in the industry or limited time. The relinquishment of the coordination effort, is especially helpful when projects require multiple work steps and areas of responsibility.
Hiring a general contractor only makes sense if you already own the land to be built on. The search for land is not the responsibility of the general contractor. If you also want to work out individual plans with your own architect and still have the project coordination handled externally, a general contractor is the perfect choice.
What should be considered when choosing a General Contractor?
General contracting is a very efficient form of cooperation in large construction projects. However, to avoid unpleasant surprises, the client should pay attention to some basic criteria.
In order to ensure that the construction project meets the client’s own requirements, it is essential to establish a basis of trust with the general contractor. Since the general contractor acts autonomously, it is essential to ensure transparent information structures and regularly scheduled consultations.
Of course, it is equally important to have a technically competent partner at your side. A general contractor should have broad market knowledge and industry-specific expertise. Since projects in interdisciplinary teams of experts are highly complex, the construction team must be well coordinated and be able to draw on experience. The choice can be guided above all by successful previous projects.
General Contracting: Tasks and areas of responsibility
The range of tasks performed by a general contractor is very broad. In principle, a general contractor relieves his client of all the tasks involved in a major construction project. Only planning is excluded from his area of responsibility.
Nevertheless, the general contractor’s work begins even before construction begins. The necessary budget must be calculated, the contractors engaged and the construction plans reviewed. Here, contact with the architect is particularly important. After reviewing the plans, the general contractor can already provide estimates regarding budget and project duration, obtain permits, engage subcontractors or hire the company’s own trades.
Once the construction site is up and running, the general contractor has oversight and control of all operations and must verify that all specifications are being met. His tasks at this stage include, in particular, the technical and scheduling coordination of all members involved. Naturally, the general contractor spends a lot of time on the construction site for this. But time management, liaison with the client and dealing with any problems that may arise also play a major role.
Differences to other construction partners
With so many different forms of construction partnership, it’s easy to get lost in the shuffle. Here are the most important differences to general contracting.
General transferees are very similar to general contractors. The main difference is that general transferees do not perform their own construction work, but delegate all tasks to subcontractors. On the other hand, the general contractor, must perform at least part of the project itself.
In the case of a total contractor, the separation between planning and execution is completely eliminated. As the name suggests, the responsibility for all tasks lies with a single company. In contrast, the general contractor does not take on any planning tasks, but works together with an architect.
Hiring a property developer makes sense when the idea for a project is still so immature that even the land is still missing. The developer then takes over all the tasks from finding a suitable building site to planning and completing the property.
How clients benefit from a General Contracting cooperation
Companies that specialize in general contracting have the necessary construction expertise and the technical prerequisites to master complex large-scale projects. With the general contractor as a partner, you have a competent contact person on site who takes care of every organizational effort, all complaints and the cost calculation. The time savings are therefore enormous.
This in no way means that the client loses control of the project. Regular consultations mean that adjustments can be made at any time. In addition, the individual construction plans are discussed with an architect selected by the client, who is in constant contact with the general contractor. Thus, two contact persons are always available.
Furthermore, the project is completed at maximum speed at an efficient price. The reason for this is that the general contractor can plan precisely through its connection to its own subcontractors. When working with a general contractor, clients can therefore go about their business with peace of mind, while the construction project is completed as if by itself.
The General Contractor Agreement
If a general contractor is engaged, a general contractor agreement must be concluded in which all details of the project are agreed. This is urgently necessary due to the complexity of the construction projects, because otherwise chaos could quickly arise. The client only needs the construction contract with the general contractor, who then independently establishes contact with possible partners.
The contracting parties are obliged to agree in advance on a clear description of services, details of prices and costs, schedules and information structures. Special wishes of the client must also be contractually regulated. In addition, general terms and conditions, guarantee declarations and surety arrangements are mandatory. Although the contract does not have to be notarized, a legal review is nevertheless recommended.
Risks of General Contracting
An important issue is also the question of liability. The law clearly states that the general contractor is liable for the obligations of the subcontractors. Of course, this is not the case for defects in the design, for which the architect is responsible.
To minimize liability risks, all goals must be as realistic as possible. If the construction period is extended because a subcontractor fails to complete tasks on time, the general contractor faces contractual penalties. There is also a calculation risk because price increases or possible additional costs fall back on the general contractor. However, if quality is cut in order to reduce costs, there is a risk of disappointing the client.
General Contracting: A summary
Hiring a general contractor is a convenient and efficient solution for managing a large and complex construction project. The general contractor is responsible for all coordination tasks. Together with subcontractors, he manages the project until the keys are handed over to the client. Good cooperation is based on trust and clear contractual arrangements. With the right partner at your side, general contracting is the chance to have a property completed smoothly and on time.