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The Role of a General Contractor

Whether building your dream home or remodeling your current one, it will require more than just an electrician and plumber. This is where a general contractor comes in.

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Project cost management is a vital part of any general contractor’s operations. It involves four key steps: resource planning, estimation, budgeting, and control. The process aims to predict future expenses to reduce budget overruns. It also helps track and monitor project progress to ensure the final product meets client expectations. Construction project management software can streamline the process by reducing data entry errors and providing real-time cost visibility.

Creating an accurate estimate at the beginning of the project is essential. A well-drafted estimate will consider the time it will take for specific tasks to be completed and the skillset and equipment required for each task. The estimate will also include the cost of materials and labor and any other fees associated with the project, such as insurance, taxes, or permits.

Another important part of cost management is establishing a cost-performance index (CPI) or schedule performance index (SPI). The CPI measures the value delivered to the customer per unit of total expenditure, while the SPI evaluates the project’s overall scheduling efficiency. This information can help you adjust your pricing model to align with the client’s expectations and improve project profitability.

Establishing a contingency fund at the beginning of the project is also crucial. This allows the team to set aside a certain percentage of the total cost for any unexpected expenses that may arise. This can be especially helpful if your company needs more resources or a difficult project environment.

Once the project is underway, it’s important to constantly update management with accurate cost reports and compare them to the original estimates and budgets. The frequency of these reports will depend on the project but should be at least weekly. This will enable you to identify any budget variances early on and take corrective actions to prevent them from affecting the project’s outcome or reputation.

Managing the finances of a construction project can be challenging, especially with uncontrollable variables like weather and material prices. It is also common for change orders to spike costs above the initial budget. To minimize these issues, it is a good idea to prepare a comprehensive statement of work at the beginning of the project and coordinate closely with clients as the construction process begins to avoid costly changes down the road.

The construction industry’s supply chain is the network of organizations that transform raw materials into a finished product. It includes all the people, resources, and activities required to deliver the project on time and within budget. Proper supply chain management in general contractor operations is vital to success. This includes understanding the breakdown and traceability of products and services, managing the flow of materials, evaluating supplier and contractor relationships, and ensuring all participants have access to the information they need to complete their tasks.

Unlike a handyperson who can handle small fixes like fixing a leaky sink or reworking an electrical outlet, a general contractor oversees much bigger projects and ensures that all parts and pieces come together correctly to create the desired result. This may mean a whole new building or a major remodel of an existing home for large construction projects. It requires hiring specialists and coordinating their work to ensure all construction phases are completed on schedule and comply with city specifications, codes, and requirements.

While a GC often has some employees who fill roles such as project manager and construction superintendent, it also relies on various specialty contractors to perform most of the labor on a given project. This arrangement is known as a project team. A GC’s role is to manage the project team, ensuring all members have the right resources and tools to do their jobs.

The GC must be able to select quality partners and vendors for material needs and then ensure that the appropriate inventory levels are available when needed. This is especially important for time-sensitive projects, such as a hotel or hospital expansion that must open on a specific date. The GC must be able to track the status of delivery schedules and make decisions about changing or canceling orders when necessary.

Lastly, the GC is responsible for the project’s payment cycle. This involves sending payments from the property owner down through various tiers of subcontractors and suppliers. The GC must be able to communicate and collaborate effectively with all involved and keep payment chains moving so that everyone gets paid on time and no one is at risk of non-payment.

A general contractor is responsible for the material, labor, equipment, and services to complete construction projects. They also oversee the work of subcontractors to ensure that each aspect of construction meets specific standards and specifications. They also maintain a safe work environment by setting safety procedures for workers and visitors and ensuring the site is free of hazards and debris. A general contractor is a valuable member of any project team because they help to keep the project on schedule and within budget.

A GC must have excellent leadership skills to manage people and resources. They must be able to assess the situation quickly and efficiently to determine the best way to get the job done. They must be able to communicate with a wide range of people, from employees and suppliers to regulatory authorities and clients. They must be able to identify and correct problems that arise during the construction process. For example, they must be able to troubleshoot why a roof isn’t pitched correctly or why the cement took so long to dry.

Licensed contractors can be trusted to provide quality work because they have demonstrated knowledge and expertise in the industry. They can also be a valuable resource for home construction and guide a project through the planning stages to keep it on track, meet deadlines, and stay within budget. A GC’s experience and knowledge can help to make the building process easier, faster, and less costly for everyone involved.

The responsibilities of a GC depend on the type of construction project. In design-build, the GC is responsible for the construction and the design process. In design-bid-build, the GC works with a design team to develop contract documents and then manages the construction of the building. They are responsible for ensuring that the final product matches the design and specifications in the contract documents.

Some GCs work under a Lump Sum or Stipulated Sum contract where they review the drawings, scope of work, and requirements, then collect quotes from several qualified specialized subcontractors for each project element, add their overhead costs, and submit a quote to the client. This contract method makes it easy for the client to compare and choose the best GC to do the work.

Safety is a top priority for all construction sites. Unfortunately, it’s not uncommon for workers to become injured, sick, or even killed in the industry. A general contractor’s role is to ensure that all employees are aware of the potential hazards on a construction site so that they can take the appropriate precautions. This means training, retraining, and reinforcing all safety procedures to ensure everyone understands what needs to be done and how it should be done safely.

One way that a general contractor ensures safety on the job site is to develop field safety manuals that are user-friendly and relevant to the type of work being performed. These manuals must be accessible to all employees likely to come in contact with them. It’s also important that a general contractor regularly inspect the worksite to identify and correct safety issues before they escalate into accidents.

Another key responsibility of a general contractor is to provide all employees with personal protective equipment (PPE) when needed and inform them when certain PPE must be worn for specific tasks. A general contractor must also provide workers with emergency information, such as the telephone numbers of the nearest hospital, ambulance service, and fire department. They must also keep an updated list of chemicals on the worksite and their corresponding Safety Data Sheets.

In addition to establishing and following site-specific policies, general contractors must follow all local, state, and federal workplace health and safety regulations. These laws typically include rules issued by the Occupational Safety and Health Administration, environmental agency, or other relevant authorities. In addition, general contractors should abide by any Teamster-negotiated safety rules and procedures.

The most important function of a general contractor is to maintain a safe work environment on construction sites. A contractor prioritizing safety can ensure that all employees are trained and competent, increasing productivity and quality. This can lead to lower costs due to less downtime, fewer lost work days, and reduced workers’ compensation and general liability insurance premium rates. Additionally, it can reduce third-party lawsuits and other hidden costs that can inflate construction budgets.