Personal Financial Tips

Article by Patrick Smith

What is a General Contractor (G.C.)A general contractor, or prime contractor in some areas, is the person or company in charge of organizing and carrying out projects such as new home building, large construction operations, renovation, demolition, building, restoration and more. In most states, they must be licensed, certified, and ensured.

For example, a they are often called upon when an owner or developer of land drafts a project plan and selects a site. Sometimes, an architect will gather a design team which would then influence the task of the general contractor. In many cases the general contractor will also participate in the design process by supplying their own design services in addition to pre-design services, where they assist in accurately estimating the budget and help to improve the cost efficiency of the operation.

After the initial stages of a project, the G.C. employs subcontractors with varying specialties to contribute to part of the project. This may include subcontractors providing electrical, plumbing, mechanical, environmental services, and more. A major consideration for general contractors everywhere is bidding. To acquire projects, they go through a variety of bidding processes.

General Contractors: BiddingBidding is a process known to virtually all G.C.’s. Whether it’s a general contractor in New Hampshire or anywhere else in the world – the bidding process involves competitively submitting proposals to manage a construction project for either a set price or a share of profit. Typically, the price submitted by the competing general contractors is based on a bill of quantities, which is a list of materials and or services provided by every party. This list outlines as accurately as possible a realistic cost per item. Often, the competing general contractors must provide as much detail as possible – demonstrating a realistic price.

While the bidding process is highly dependent on price, many times price is only one small factor. Often, they will submit a lower price to secure the bid when in actuality that lower price is infeasible, resulting in the project running over budget.

Design-Bid-Build BiddingAnother common bidding process is the design-bid-build method, where an owner selects an architect who releases construction documents to a group of general contractors, who then bid on the project. In the competitive bidding process, each G.C. proposes what they believe the cost of the project will be in total, with costs such as materials and the contractor’s fee included.

Design-BuildAnother common bidding process is design-build bidding. With this method, the design and construction detailed are handled by a single business – the design-build contractor, which is usually the G.C. or even the architect. With this system, project risk is minimized for an owner or real estate developer and the delivery schedule is shorted by combining the design and construction phases of the project.

As you can see, working as a G.C. means managing and overseeing a variety of processes – from bidding to project execution.

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