It's essential to understand the differences between hiring a general contractor and a construction manager, especially when it comes to construction management development for residential and commercial projects. Both options are legal entities and insured, or you could undertake the job yourself, though that is not recommended.
A construction manager acts as an agent on your behalf, overseeing the project to ensure it aligns with your plans. Essentially, they serve as your eyes and ears on the job site. At Charles Anthony Consultants, we typically utilize AiA Contracts, which are prepared by construction attorneys for completeness and fairness. We onboard the best construction managers in the industry to supervise your project needs, and occasionally we can staff with your referral. Most contracts are structured as Stipulated Sum or GMAX, plus a percentage of the client budget, projected duration, and complexity, while overseeing project operations and licensed subcontractors. All plans, permits, and bonds are paid by the client.
Construction managers can assist you in finding trades and suppliers, but you are ultimately the one contracting with these professionals and handling the payments. With their experience in the construction field—often as former general contractors—construction managers can direct workflow, manage costs, and inform you about potential issues. However, they are not responsible for construction problems or cost overruns. When it comes time to close out your project, you will receive two bills: the overall cost of your project and the construction manager’s separate costs.
On the other hand, general contractors are licensed and handle the completion of a project from start to finish, even for smaller jobs. Any cost overruns or issues that arise are the concern of the general contractor, not yours. Of course, if you authorize additional work or reduce scope during construction, those costs will be itemized in a change order agreement.
When comparing the roles of a general contractor and construction manager, you'll find that general contractors bear significantly more responsibility, which is reflected in their cost. A general contractor’s fee typically ranges from 20% to 30% of your total project cost, plus an additional 15% for change orders related to labor and materials.
When dealing with substantial investments, it's natural to look for ways to cut costs. You may feel tempted to forego the expense of a general contractor or construction manager. However, if you lack construction experience, you might find that leading an entire team to build a house or commercial development is daunting. One significant difference is the