What is the difference between gc and cm

The project manager then draws up plans and procures the resources necessary in a collaborative and open-book fashion. Construction managers are also brought on board earlier in the project, often before a design has been finalized or costs can be fully estimated in detail. Once a general contractor is hired in a lump sum or fixed price environment, they have an incentive to protect or enhance their profit margin.

This places the general contractor on the other side of the table. They can define mark-ups during this stage, but hold off on defining final costs until the project is defined enough to convert to an at-risk value. That way, work can proceed with reduced risk and cost to the owner and without delaying the start until the entire project is designed. It also shares administration of the project contingencies and means that any savings will revert to the owner instead of the contractors.

The construction manager can then solicit bids for subcontractors and equipment, involving the owner in the process so that the owner has the final say in the final budget.

For example, the construction manager can draw up a foundation package and an equipment package, then bid each one to specialized subcontractors. This also comes with the added bonus that the project can move ahead even before the full scope has been defined.

But what about the alternative of using a general contractor? Thus, when recommendations or decisions are made, motives can be questioned. In a traditional design-bid-build scenario, market feedback usually occurs only after the project is already fully designed and out for bid. Viable money-saving alternatives usually mean re-design with all the associated costs of rework and the delay of completing new documents. A major advantage of having a construction management team helping out early in the process is overlapping your procurement and construction phases with your design phase.

As you can see, there are good reasons to be a general contractor or construction manager. The risk you are willing to take, the employees you will hire and the type of expertise you possess — all determine what is the best construction company type for you! If you need help deciding which type of construction company is best for your firm, please feel free to contact us!

Join our elite group of trade contractors. Private vs. Show all. Published by standett at August 13, That is a lot to consider! What type of employees do I need as a Construction Manager? What is the relationship like with the project owner as a General Contractor? When the overall costs of the completed project come under the bid price, the General Contractor benefits and gets to keep those unused funds as profit.

However, any cost overruns require asking the owner for more funds or changing project scope. This happens more frequently as the General Contractor was not involved in the pre-construction phase to assist in providing more accurate estimates. The Construction Manager is a more collaborative partner with the owner of projects.

There is usually not competitive bid in the selection of a Construction Manager, and their selection is generally based on qualifications and experience versus lowest price. Construction Managers typically paid on a fee-based pricing flat, per hour or percentage of project costs , so there is no competition for profits like with a General Contractor.

Either an individual or an organization, the Construction Manager is brought on at the very beginning of the project providing input on the design and working directly with subcontractors to provide more realistic costs and timeframes. With the involvement of the subcontractors in the design phase, this provides adjustments to be made during the pre-construction process versus costly change orders in the construction phase.

In the design-build method, the hiring agency contracts with one team to design and build the facility. This facilitates communication among team members, but the agency loses a level of control and commits all its monetary resources to one entity.

Because the design and construction units work together as a team, construction proceeds in one area while another section is still being designed. This improves communication between the two parties because the general contractor acts as a construction manager and provides input on the availability and cost of suggested materials and perhaps offers cheaper alternatives.

This method costs the agency more for the general contractor's time, but his suggestions on the affordability of different designs can save the agency money in materials.