When planning a construction project, you must hire the best general contractor. This will ensure your project runs smoothly and according to plan. Before hiring a GC, check their track record and ask for references. Also, verify their licenses and insurance.
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A general contractor is responsible for managing all the moving parts of a construction project. They act as a liaison between the property owner and everyone who brings a building to life, including subcontractors and vendors. GCs must ensure that the work being performed meets specifications and is completed in accordance with deadlines. They must also address any challenges that may arise and make adjustments to the schedule or budget as needed.
The responsibilities of a GC can vary depending on the type of construction project and the delivery method chosen by the property owner. Some GCs will assume all of the managerial duties while others will subcontract out specialized tasks. For example, a GC working on a large commercial construction project will likely hire a specialty contractor to perform excavation and site preparation.
It’s important to find the right general contractor for your home renovation or new build. Choosing a qualified professional can save you time, money and stress, and ensure that your project is completed correctly and on schedule. Start your search by reviewing online reviews, checking out local listings and sourcing recommendations from friends and neighbors. You can also check state licensing requirements to ensure that contractors follow guidelines for insurance and taxes.
Budgeting
One of the most important aspects of a construction project is budgeting. It provides a roadmap to guide the project and help everyone stay on track. It also enables you to build trust with clients and suppliers by consistently coming in under budget.
The first step in the budgeting process is calculating hard costs. This includes labor, materials, equipment, and other direct expenses. It is helpful to work with a professional estimator to ensure you are getting an accurate picture of the cost.
Other soft costs include design fees, which may be carried by the general contractor or the project owner. These fees cover fees for architects, engineers, interior designers, surveyors, and other consultants that create the project specifications. These costs are often based on a percentage of the total project cost.
Indirect costs such as permitting and pre-construction services are also included in the budget. These costs may be the responsibility of the general contractor, subcontractors, or the project owner depending on contract stipulations.
Lastly, the budget should include a line item for change orders. These costs can be a significant disruption to the project if not managed effectively. Using a construction-specific software can enable you to easily track and manage these costs.
Scheduling
Construction scheduling is a precise planning and organizing process that coordinates multiple tasks, resources, and timelines to ensure on-time project completion. It’s a big deal for General Contractors because it enables them to manage complex projects with intricate details, ensuring on-time project delivery and minimizing costly delays.
The five key activities in construction scheduling include work breakdown structure, critical path, resource allocation, and risk assessment. By assessing these five aspects, a project schedule can be optimized for efficiency and profitability.
For example, a well-defined work breakdown structure allows you to break down large tasks into smaller components, which makes it easier to identify and allocate resources. It also helps you understand how these components interact, allowing you to avoid schedule conflicts.
Moreover, scheduling enables you to minimize costs by identifying and mitigating potential risks. Taking into account external factors, such as weather, regulatory approvals, and supply chain disruptions, is important for predicting and preventing schedule deviations. This way, you can prevent financial repercussions and maintain a high level of productivity. Also, it’s crucial to communicate with crew members about schedule changes or issues as soon as they occur. Otherwise, you may be wasting money and time that you can’t recover.
Negotiating Contracts
Contract negotiations are an important aspect of a general contractor’s life. The key to success is identifying the contract provisions that pose risks and negotiating the best terms for your company. This is particularly critical when you have the opportunity to see a contract during the bidding process and can have legal counsel review the terms and recommend any modifications before submitting them with your bid.
Another area of importance is the scope of work, as defining this early on prevents cost overruns and delays. It’s also helpful to negotiate for a pencil requisition process so the project architect has time to approve progress payments before they are due. This prevents rushed inspections that result in overpayment.
Negotiating requires compromise and finding common ground benefits both parties. However, you should never accept a term that unfairly disadvantages your company. If you are unable to come to an agreement, don’t be afraid to walk away. Effective negotiation often involves creativity, so don’t be afraid to propose alternative solutions and be prepared to stand firm on your non-negotiables. By bringing a positive attitude and focusing on the needs of both parties, you can make successful business relationships that last.
Subcontracting
In construction, there are a lot of moving parts that need to be coordinated to bring a project to completion. General Contractors are the primary point of contact for all construction activities, and they ensure that subcontractors complete their work in a timely fashion and that payments are distributed appropriately.
A GC typically hires specialty contractors, also known as subcontractors, to perform the labor on-site. Specialty contractors often specialize in a specific task like electrical wiring, plumbing, or steel framing. In larger projects, a GC may hire one specialty contractor to complete a large part of the job and then another specialty contractor to complete an even more specialized portion of the job.
GCs oversee the project on a daily basis, making sure that the subcontractors are working efficiently and that the project stays within budget. They also handle managerial and administrative tasks, such as procuring materials, negotiating government contracts, monitoring the project’s progress, and keeping on top of its financial movements.
Licensed GCs are subject to strict state and local regulations to ensure that they follow insurance, tax, and safety guidelines. They also take pride in their workmanship and carefully inspect all work for quality standards, ensuring that the job is done right. In addition, reputable GCs prioritize the protection of their clients’ personal belongings and home and provide clear plans for maintaining cleanliness and minimizing disruptions throughout the construction process.
Insurance
Insurance is an enormous part of general contractors’ lives. Because construction sites are dangerous places, any number of incidents could occur that lead to expensive lawsuits. Even with the most stringent safety protocols, accidents happen. The cost of a property damage, crew injury or advertising injury can be debilitating for any contractor.
Licensed and insured contractors are more likely to do quality work because they have a financial incentive to produce builds that meet contract standards. Unlicensed contractors are more prone to substandard buildouts that can be costly for home or business owners to fix later on.
General contractors should carry commercial general liability (GL) and builder’s risk insurance as well as other types of coverage based on state regulations and licensing requirements. Those who manage large projects or are working on public-funded jobs may need to add project-specific commercial property insurance (OCIP) to their GL policies.
In addition to a robust offering of general contractor insurance, Next Insurance also offers a number of other industry-specific policies. For those looking for quick, affordable coverage that can be secured online, Next is a top choice among small businesses. Chubb is another excellent option for those seeking a general contractor policy with higher claims limits and builder’s risk. Both companies rank highly for customer satisfaction and have excellent financial strength ratings.
Experience
While a general contractor can provide the expertise necessary to manage the various aspects of construction, they also know how important it is for everyone involved in the project to remain focused on the tasks at hand. GCs make sure that every step in the process is completed, from procuring building permits to hiring subcontractors and delivering materials, while keeping the project on schedule and within budget.
Whether it’s new construction, renovation or remodeling, a quality general contractor will have established relationships with local suppliers and subcontractors to ensure that supplies and labor are affordable. They will also be familiar with the local codes to ensure that all work complies and that projects can pass a home inspection.
In addition to negotiating contracts, a general contractor will prepare and submit bids for projects. They will use their knowledge of the project’s scope to estimate how long it will take and what each task will cost. The bid will then include the contractor’s fee and any additional costs such as permits, fees or equipment rentals.
Most GCs have prior experience in the industry, either through on-the-job training or through formal education. Colleges offer diplomas and bachelor’s degrees in construction management, which are often combined with apprenticeship programs to teach practical skills.