There are numerous companies across the globe and the stakeholders of a construction project. In other words, every individual involved in this kind of project- the architect, construction manager, general contractor, and others have different functions. However, all of these individual entities come together to make the project a truly successful one only with the help of a conductor who provides necessary guidance and directs the project accordingly on the right budget and within the specified time.
The Construction Manager or General Contractor is responsible for this stirring and conducting in massive commercial projects. These ones have the same goal, which is to execute the project satisfactorily. Meanwhile, the Construction Manager and General Contractor are differentiated by their process of selection for the particular project, what relationship they have with the owner of the project and the entire organizational structure.
On a project, the General Contractor is basically an individual who oversees the management of the daily activities on the construction site. In simple terms, they are the ones at the forefront of building or constructing the building. That does not mean they are the ones who do the labor but they have their own people (employees and laborers). The employees can be the project manager or foreman. These ones either do the project all by themselves or make use of other special subcontractors.
The general idea is that a number of subcontractors complete about 80-90% of the project work in large commercial projects. In this case, the General Contractor doubles as the project manager because his primary assignment is to coordinate the work of these subcontractors and stand in as the liaison when communicating with the architect or project owner on project activities.
The method of awarding projects to some General Contractors can be based on the previous relationships they have had with the owner or architect. Nonetheless, it is expedient for them to submit a proposal to be considered at all. The architect gives the contractors who received an invitation to bid a set of the completed plans and specifications. After that, the General Contractor collects proposals from the interested subcontractors, especially the ones with the lowest price bids and add every extra markup and overhead costs in the final bid submission. Once the submitted proposals have been reviewed, the owner of the project then selects and awards the project on the basis of price and quality.
Similarly, it is the responsibility of the General Contractor to ensure the entire project is kept within budget. The General Contractor gets whatever is left from the project once the overall costs of the completed project are found to be lesser than the bid price. The unused funds are then kept as profit. However, in a situation where there is a cost overrun, the owner of the project is asked for more funds or his consent sought for altering the scope of the project. This often happens when the General Contractor was not part of the pre-construction phase in order to provide better accurate estimates.
Generally, the Construction Manager has a more collaborative relationship with the project owner. As against what we have with the General Contractor, the Construction Manager does not have to be involved in some competitive bid to be selected. In other words, they are most often than not, selected on the basis of their experience against the lowest price and qualifications. In addition, their payment is on fee-based pricing (at once as a lump sum, a percentage of the total project costs or per hour). That means they do not have any form of competition whatsoever with the General Contractor in terms of profit.
Whatever the situation is, as an individual or an organization on its own, the Construction Manager is introduced into the project at the very initial stage to provide inputs on the design and directly work with the subcontractors in order to provide costs that are realizable and time-frames that are achievable. When subcontractors are involved in the design phase, they cater to all of the possible adjustments that could be made during the pre-construction process against the changes incurred in the construction phase. Thus, the Construction Manager does the onsite supervision of the subcontractors the same way the General Contractor would but the Construction Manager has a more direct and collaborative relationship with the owner of the project or the architect.
Actually, it is not every time that there would be cost savings when either of these individuals or organizations are used. The most significant difference is just in the collaborative partnership or relationship the Construction Manager has with the owner and their participation in the early phase of the project before construction begins. In a contrary manner, in a situation where there is some level of established relationship between the owner of the project and the General Contractor, the General Contractor takes on the role of the Construction Manager and is introduced early enough in the project to provide advice, participate in the design phase and provide some more accuracy with the estimates. Similarly, the General Contractor does not have to submit a competitive bid proposal to be selected but rather, give a more realistic proposal on the basis of their insight into the design development.
As a sum, the owner of the project or the architect makes the preference between choosing the General Contractor or the Construction Manager or better still perform an evaluation on a project-by-project basis. Whichever way, everyone has to contribute their own quota to achieve a successful project and deliver a satisfactory job to the owner.