General Contractor
Definition
A general contractor is a professional or company responsible for managing and coordinating the construction of a building or other improvement projects for the owner or developer. This role involves ensuring that the project adheres to the architectural plans, complies with local building codes, and is completed within the agreed timeframe and budget. General contractors may employ a construction labor force or hire subcontractors to complete specific aspects of the project, such as foundations, walls, roofing, electrical systems, and plumbing.
Examples
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Collins and Baker’s Office Building Construction: Collins, a landowner, has architectural plans and specifications for an office building. She enters into a contract with Baker, a general contractor, to build the structure. Baker hires subcontractors who put up the foundation, walls, roof, electrical, and plumbing systems, effectively managing the entire construction process.
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Residential Home Renovation: Smith wants to renovate his home and hires a general contractor. The contractor is responsible for coordinating plumbers, electricians, and carpenters, scheduling the work, obtaining necessary permits, ensuring compliance with building codes, and completing the project on schedule.
Frequently Asked Questions
What is the role of a general contractor?
A general contractor oversees the entirety of a construction project, coordinating all aspects from planning and execution to completion. This includes managing subcontractors, adhering to schedules, ensuring compliance with building codes, and budgeting.
What qualifications are required to become a general contractor?
Qualifications for becoming a general contractor typically include a combination of education in construction management or related fields, relevant work experience, and obtaining necessary state-specific licenses and certifications.
How does a general contractor differ from a subcontractor?
A general contractor manages the overall construction project and coordinates the work of various subcontractors. Subcontractors are hired by the general contractor to complete specific tasks, such as plumbing, electrical work, or roofing, within the project.
Do general contractors need to have their own labor force?
Not necessarily. General contractors may have their labor force, but they often hire subcontractors to perform specialized tasks that require expertise in specific construction areas.
How are general contractors paid?
General contractors are typically paid through a combination of a lump sum, progress payments based on milestones, or a percentage of the total project cost. Payment terms are usually detailed in the contract with the owner or developer.
- Subcontractor: A specialized contractor hired by the general contractor to perform specific tasks within a construction project.
- Building Permits: Legal authorizations obtained from local government agencies that allow for the commencement of construction projects, ensuring compliance with building codes and zoning laws.
- Construction Management: The management of construction projects, including planning, coordination, budgeting, and supervision of works.
- Project Timeline: A schedule that outlines the expected sequence of events and timeframe for various stages of a construction project.
Online Resources
- Construction Business Owner Magazine
- National Association of Home Builders (NAHB)
- Construction Management Association of America (CMAA)
References
- Investopedia. “General Contractor.” https://www.investopedia.com/terms/g/general-contractor.asp
- National Association of Home Builders. “What is a General Contractor?” https://www.nahb.org
- Construction Management Association of America. “Construction Management Standards of Practice.” https://www.cmaanet.org
Suggested Books for Further Studies
- Construction Management Jumpstart: The Best First Step Toward a Career in Construction Management by Barbara J. Jackson
- Managing Construction Projects: An Information Processing Approach by Graham M. Winch
- Professional Construction Management and Project Administration by Donald S. Barrie, Boyd C. Paulson
Real Estate Basics: General Contractor Fundamentals Quiz
### What is the primary role of a general contractor?
- [x] Overseeing and coordinating a construction project.
- [ ] Only performing electrical work.
- [ ] Only planning construction projects without any execution.
- [ ] Only painting and finishing work.
> **Explanation:** A general contractor's primary role is overseeing and coordinating the entire construction project, including hiring and managing subcontractors and ensuring the project is completed on time and within budget.
### Which of the following tasks is typically managed by a general contractor?
- [x] Hiring subcontractors for specialized tasks
- [ ] Only installing plumbing systems
- [ ] Only creating architectural designs
- [ ] Only providing raw materials
> **Explanation:** General contractors manage the overall project, which includes hiring subcontractors for specialized tasks such as plumbing, roofing, and electrical work.
### Do general contractors need to have their labor force for construction projects?
- [x] Not necessarily, they can hire subcontractors.
- [ ] Yes, they must have their labor force.
- [ ] No, they can only manage projects without any direct labor.
- [ ] They cannot hire any subcontractors.
> **Explanation:** While general contractors can have their labor force, they often hire subcontractors to perform specific tasks requiring specialized skills or equipment.
### What is the difference between a general contractor and a subcontractor?
- [x] General contractors oversee the entire project, while subcontractors perform specific tasks.
- [ ] Subcontractors oversee the entire project, while general contractors perform specific tasks.
- [ ] Both general contractors and subcontractors perform all tasks equally.
- [ ] There are no differences between general contractors and subcontractors.
> **Explanation:** General contractors oversee the entire construction project, while subcontractors are hired to perform specialized tasks within the project.
### What type of permit must a general contractor secure before starting a construction project?
- [x] Building permit
- [ ] Fishing permit
- [ ] Driving permit
- [ ] Event permit
> **Explanation:** General contractors must secure building permits, which authorize the commencement of construction projects and ensure compliance with building codes and zoning laws.
### What qualifications are commonly required for becoming a general contractor?
- [x] Education in construction management, relevant work experience, and required licenses.
- [ ] Only a high school diploma without any specific experience or licenses.
- [ ] Only a degree in architecture.
- [ ] No qualifications are required.
> **Explanation:** Becoming a general contractor typically requires education in construction management or a related field, relevant work experience, and necessary state-specific licenses and certifications.
### How are general contractors usually compensated for their services?
- [x] Through lump sum payments, progress payments, or a percentage of the total project cost.
- [ ] They are not compensated and work voluntarily.
- [ ] They receive only tips from property owners.
- [ ] They are paid hourly without any project milestones or completion fees.
> **Explanation:** General contractors are often compensated through lump sum payments, progress payments based on milestones achieved, or a percentage of the total project cost, detailed in their contract with the owner.
### Who hires subcontractors in a construction project?
- [x] The general contractor
- [ ] The property owner
- [ ] The municipal government
- [ ] Neighboring property owners
> **Explanation:** The general contractor hires subcontractors to perform specific tasks within the construction project.
### Which of the following is a benefit of hiring a general contractor for a construction project?
- [x] Coordinating various aspects of the project and ensuring compliance with building codes.
- [ ] Making the property twice as large as planned.
- [ ] Immediately finishing the project without any planning.
- [ ] Ignoring local zoning laws.
> **Explanation:** A general contractor coordinates various aspects of the construction project, ensuring that it adheres to plans, budgets, and compliance with local building codes.
### Do general contractors need to obtain multiple permits during a construction project?
- [x] Yes, multiple permits may be required for different aspects of the construction.
- [ ] No, only one permit is ever required.
- [ ] No permits are needed at all.
- [ ] Permits are only needed for residential projects.
> **Explanation:** General contractors often must obtain multiple permits during a construction project to ensure all aspects of work comply with local laws, including building permits, electrical permits, and plumbing permits.
