6 – GENERAL CONTRACTING
The industry-recognized description of General Contracting is an entity that performs construction services for a stipulated general maximum or negotiated price.
Typically, the General Contractor is provided with a set of architectural construction documents that depict the project to be constructed along with the specifications that describe the particular details required.
The General Contractor prepares a detailed estimate of the project, assembles a project schedule, creates a logistics program and solicits subcontractor pricing to confirm the cost of the work, per the architectural documents. The typical General Contractor self-performs trade work as appropriate, with their own manpower resources.
The General Contractor’s ability to negotiate subcontractor pricing, manage the schedule performance and expedite the schedule allows for maximum profitability while exposed to maximum risk.
Any changes to the original drawings, specifications, or schedule generate “change orders” which cause additional costs that are paid by the Property Owner.
This process is most typical in the public works, competitive bid arena. It is the least interactive, proactive contracting method.