What is the difference between General Contractor and Construction Manager?
This is a question we get asked by clients, so we’d like to take the opportunity to provide an explanation right here! All in all, both positions are extremely essential to a construction project and are very similar in scope.
Both a General Contractor (GC) and Construction Manager (CM) fully manage the project at hand and have nearly identical responsibilities. Both a GC and CM are responsible for appointing, coordinating and corresponding with the subcontractors. They both organize the progression of the job and communicate updates directly with the client.
The main differences between a GC and a CM is that a GC will typically begin the construction process with a client right after their plans are completed. A GC will consult with the client regarding their detailed wants/needs and present a lump-sum budget estimate for the client based on their conversations and the plans at hand. This budget will be inclusive of all costs plus the GC fee. Once the budget is approved, the GC will uphold the main liability and responsibility in regard to the subcontractors. Depending on the timing, the client will get either an itemized invoice or progress payment invoice from the GC; and the GC will then have to personally disburse payments to the subcontractors. The GC is responsible for the invoicing, accounting and payment of the subcontractors.
Whereas, a Construction Manager (CM) can begin working with a client at any point in time. They are brought in mainly as a project manager and the client will typically hold the liability and responsibility in regard to the subcontractors. Although a CM will help source the subcontractors, the client will personally sign off on all sub bids and pay these invoices directly. The CM works solely off a fee-based agreement which is a percentage of all project costs.
Overall, both GC and CM roles serve to make the construction process as seamless and successful as possible for their clients. They are extremely valuable positions and prove to be an essential part of any home renovation or new build. In our experience, most of our clients prefer the certainty around having us GC their project. They like that they have a clear, itemized budget prior to commencement and do not need to hold the liability and accounting of subcontractors.
However, each project is unique – so our position truly depends on our client's needs.