General Contractors are responsible for a project from the design stage to its completion. They manage the project based on the delivery method chosen.
A GC’s license should be up to date and they should have a large number of references. They should be able to provide these upon request.
Whether it’s a small home improvement project for a homeowner or a large commercial build, local licensing requirements are essential to establishing a GC’s credibility and trustworthiness. Licensing also confirms that a contractor is following guidelines for insurance, taxes and safety. Owners and contractors alike benefit from a GC’s commitment to compliance.
Licensed GCs oversee teams of subcontractors who carry out the more specialized aspects of construction projects. They are responsible for procuring materials, obtaining permits and ensuring that work on a jobsite is completed to local standards. They are also the primary source of communication between clients, designers and coop or condo boards.
As a licensed general contractor, you’ll need to maintain liability and workers compensation insurance coverage. Having the proper insurance will help you avoid costly legal and regulatory consequences and ensure that your team is protected in case of injury or property damage.
To qualify for a GC license, you’ll need to meet a variety of local requirements, including submitting an application, passing an exam, and providing documentation like a business certificate and proof of insurance. These requirements vary by state and municipality, so it’s important to check with your local licensing authority for more information.
In addition to a general contractor license, you’ll also need a building permit for most construction projects. Depending on the size of the project and your city’s regulations, you may need to apply for an electrical, plumbing or roofing permit separately.
Some contractors specialize in specific areas of construction and only need a general contractor’s license to perform those tasks. Others require a full professional license to take on any projects that fall within their scope.
In most cases, a GC will only accept a negotiated contract from an owner that they have a history of working with and trust to deliver on quality and schedule. In this scenario, the GC is willing to accept lower fees in return for a stronger relationship with the client and the ability to negotiate terms and conditions on future projects. Whether it’s a negotiated contract or a bid, a GC is the lead professional on every construction project and takes responsibility for the outcome of each job.
Bidding
Bidding is one of the main activities a general contractor conducts. They often send out RFPs, or requests for proposal, which request contractors to submit a bid on a project. To do this, they have to include all the details about the project in their bid. This includes the expected costs for construction, project timelines, and their business information. They also need to submit their insurance documentation, like workers’ compensation, general liability, and builders risk insurance.
After the GC has completed the bid proposal, they have to submit it to the client. They also have to submit any additional documents, called addenda, that address any changes in the original bid. These usually involve changes to the scope of work, or to the contractor’s pricing. The GC needs to clearly communicate their pricing in their bid, which will help them win projects.
Another important aspect of bidding is communicating with the clients throughout the process. This helps a GC develop a strong relationship with the client and ensures that they are on the same page. This is especially crucial in a competitive bidding environment, where the client may look at multiple GCs for the same project.
One of the biggest mistakes a GC can make is failing to communicate with the client and subcontractors after the bid submission. This can lead to missed opportunities and can even cost them the job. To prevent this from happening, GCs should implement a follow-up system that consists of emails and phone calls. They should sync these tasks to their calendar so they never forget them.
During the bidding process, it’s important for a GC to find subcontractors who are ready and willing to work with them. This can be a challenge because many quality subs are already busy and don’t have the time to take on new projects. To overcome this obstacle, GCs can leverage sub networks that connect them with subcontractors who are actively seeking project opportunities. This will save them time and effort in finding the right subs for their bids. In addition, it will help them build a strong project team and increase their chances of winning the contract.
Contract Negotiation
When it comes to construction projects, there is often a lot of money moving through various tiers of the project. General contractors need to know how these transactions are structured and the contract negotiation procedures to follow in order to avoid payment delays for themselves and their subcontractors. This can include understanding how payments move from the property owner down through the subcontractors and suppliers to the GC, including any liens that might need to be paid.
A GC typically has their own team of professionals to handle all financial management of the company and the projects they are working on. This includes accounting, bookkeeping and overall financial management. In addition, a GC needs to have a solid supply chain management system in place to keep all personnel and materials where they need to be on the jobsite. This is essential in any commercial construction project due to the large number of people moving throughout a project and the need for specialized equipment that can only be brought into a jobsite in small pieces.
Another key task a GC performs is to create, finalize and approve a design with the client for the work that will be performed on the jobsite. This is especially important in a Design-Build project setting where a client is hiring a GC to complete the entire scope of the project, from design to completion.
It’s also helpful for a GC to be able to negotiate contracts for the various supplies and services needed to bring the project to life, like labor; tools; equipment; materials; and permits. It’s a good idea for clients to compare costs of these items between multiple companies in different seasons, as prices tend to be lower during slower times. It can be helpful to ask a contractor for specifics on how they arrive at their cost estimates, too. It can help a client feel more confident that the contractor is not overcharging them for the work that will be done on their project. A good contract will also lay out processes for dispute resolution that can include mediation, arbitration and ultimately court action if the parties are not able to reach an agreement by themselves.
Project Management
Managing construction projects requires coordination of multiple tasks, resources and contractors. A general contractor identifies labor and material needs and shapes a budget for a project. It also collaborates with design and engineering teams to assess constructability. In addition, it secures necessary permits and regulatory approvals for the work. It also develops a schedule that includes critical project milestones. It also establishes a plan for handling emergencies and unplanned events.
Depending on the scope of the work, it may involve specialty contractors who perform tasks such as mechanical or electrical installation. In these cases, the GC must negotiate and sign contracts with these specialty contractors. Other specialty contractors include excavation, foundation or demolition specialists. Legal statutes often require that these specialties be given a prime contract separate from the GC.
While many general contractors employ a project manager, some owners opt to hire professional construction management firms. These professionals translate the plans and specifications into tangible end products. They also manage the construction process by establishing a work breakdown structure, setting quality standards, determining project budgets, allocating resources, coordinating with vendors and arranging for risk management.
Project managers must communicate with the GC regularly to ensure that all parties are aware of progress and any potential problems. They also set a clear communication plan that matches the overall project management plan. This helps avoid miscommunications that can impede project completion and increase costs.
As construction progresses, the project manager must closely monitor work progress against the established schedule and budget. This involves monitoring the work of all subcontractors and suppliers and addressing issues when they arise. It is important for the PM to maintain communication with both the GC and the owner to help prevent disputes or confusion that could jeopardize the success of the project.
During the construction phase, the project manager must continually review the project budget and work status with the GC and the owner. This will ensure that the project remains on schedule, within budget and meets all required quality standards. Project management in construction also includes a continuous assessment of the impact of changes on the project schedule, cost and quality.