A general contractor is the one responsible in managing the entire construction process from start to finish. General contractors are also known as main contractors, project managers or project architects. A general contractor, moreover, is responsible for day-to-day supervision of an entire construction site, coordination of trades and vendors, and arranging the exchange of information throughout the duration of a construction project. A general contractor’s services include everything that has anything to do with the actual execution of a project from the beginning to the end, starting from coordinating and managing bids from various contractors, planning and preparing sketches and designs to the erection and installation of equipment used in the construction process.
Being the general contractor’s right hand man, the general contractor is in charge of the project’s success. This is why the construction manager plays such a crucial role as the general contractor’s right hand man. The construction manager oversees every single activity that has anything to do with the success of the project; this includes everything from collecting information from the bidding public, preparing the bid, reviewing the bid, collecting payment from the highest bidder, and organizing all subcontractors and suppliers as well as liaising with the subcontractors and suppliers. In addition to all these activities, the general contractor also handles the entire financial aspect of the construction. Financial duties of the general contractor include handling contracts, overseeing the general contract, arranging the payment schedules and setting up bank accounts.
Aside from handling the financial aspect of the construction work, the general contractor is also tasked to oversee the overall design and layout of the project. Therefore, it is important to ensure that the general contractor has a comprehensive design and layout knowledge. A general contractor must be licensed in order to legally perform contracting work in most states. However, licensing requirements vary by state.
In order for contractors to become licensed, they must first complete a Builders’ State Contractor Examination which assesses contractors’ knowledge, skill, experience and ability to successfully carry out the job according to the original contract. Once licensed, the state will then determine if the general contractor has met all requirements needed to become an authorized Builders’ State Contractor. After being approved to practice, licensed contractors are then able to submit bids on any building and remodeling projects that require the services of an expert contractor and subcontractors.
Although most people think of contractors as the sole service providers of building projects, there are many instances wherein contractors serve as an independent contractor for various projects. For example, if a person wants to start his own business, such as designing a new office or store, he does not have to hire a general contractor in order to obtain the necessary permits in order to start the business. Although this scenario occurs less often, this kind of arrangement is actually encouraged by the State Department of Finance since it allows small business owners to save money. In most states, contractors are also allowed to hire their own inspectors to check on the quality of work done by the company, but the role of an independent contractor is much different when it comes to the State Department of Finance.
Although contractors generally get a higher amount of payment compared to their independent counterparts, this is usually not the case when it comes to subcontractors. Many companies or individuals who hire subcontractors to perform different tasks usually include the subcontractor’s payment in the overall cost of the construction project. As the payment for contractors and subcontractors can be quite high compared to general contractors, there are even instances where they end up paying more than what they should. If the overall construction costs of the project exceeds $500, it is important that the general contractor and subcontractor both find a way on how they can split the expenses. This is why hiring an agent is better since it is already stipulated in the law that only one individual can hold the title to a certain project.