General contractors are responsible for a construction site’s day-to-day operations, quality control, and deadlines. General Contractor Lexington KY turn the designs and renderings of architects, engineers, and interior designers into reality.
In addition to securing work, GCs must also take care of overhead expenses, including workers’ compensation and liability insurance. They typically mark the cost of materials and labor by a certain percentage, ranging from 10 to 30 percent.
Project Management
Project management is a discipline that is focused on delivering specific results within a defined timeframe and budget. This is the foundation of what distinguishes it from general management. It involves the application of processes, methodologies, skills and knowledge to achieve a project’s acceptance criteria. It also includes the development of a plan to deliver specific results for each project phase.
While many people mistakenly believe that the duties of a general contractor and a project manager are the same, the two positions have very different functions. General contractors handle the physical construction of a project, while project managers coordinate and oversee the entire project.
A project manager will utilize their experience to meet with the client and review the scope of the work, timelines and cost. They will then create a list of potential design, engineering and general contracting firms that are best suited for the project. They will then interview each firm to select the one that has the qualifications, expertise and experience necessary for the task at hand.
Once the final design is selected, a project manager will create a bill of quantities. This will include all the labor and material requirements for the project. They will then use this information to develop the contract documents and submit them for bid. They will also apply for any building permits and secure the site, if needed.
During the preconstruction phase, a project manager will make sure that all parties involved in the project are on board and understand their roles. They will also establish an appropriate schedule for completion and set hefty penalties for if the deadline is not met. They will also negotiate with subcontractors to ensure that their rates are competitive and manage any logistical issues that may arise.
Subcontractor Management
Subcontractors are a critical part of construction projects. They are specialty contractors who help a general contractor complete project tasks within budget and on time. A GC may use subcontractors to handle everything from plumbing, drywall, and steel framing to electrical wiring or concrete installation. Subcontractors can also work on a more specialized task like painting or roofing. On large, complex projects, a general contractor might even hire a sub-subcontractor to handle an even more specialized aspect of the job.
A GC will often develop a network of subcontractors they use on regular basis for each area of the country in which they work. These are typically local contractors with a reputation for quality and integrity. The GC will then monitor how well subcontractors are performing on the project. If the GC sees that subcontractors aren’t meeting their quality standards, they will intervene and make adjustments to protect their bottom line.
Keeping a good relationship with subcontractors is critical to a successful project. It’s important for the GC to communicate clearly and set expectations in the pre-award phase of each project. It’s also crucial that they keep the lines of communication open throughout each phase of the project. This helps to avoid miscommunications and misunderstandings that can lead to costly delays.
A GC should also consider how easily they can accommodate any changes to the project scope. If they are unable to handle a change in the project, it will cost them time and money and might cause the quality of their work to suffer. It’s also helpful for a GC to have an established system for handling change orders, scheduling and coordinating with subcontractors. Digital tools are an excellent way to streamline this process and eliminate the need for cumbersome paperwork.
Budgeting
A general contractor is responsible for the day-to-day operations, quality control and deadlines at a construction site. They also turn the visions and renderings of architects, engineers and interior designers into a reality. As a result, the role requires a diverse set of skills and abilities.
One of the most important duties is budgeting. A GC needs to be able to determine the costs of all materials and labor, then provide a project cost estimate to the client. This is typically done during the design process, but can happen at other points in the project life cycle.
The estimate takes into account all the direct construction costs, including field supervision and equipment, as well as a markup for overhead and profits. It also includes general conditions costs, permit fees, insurance and a variety of other expenses. A GC should be able to explain the different factors that influence the cost estimation process in a clear manner.
GCs have to be able to communicate clearly with all project members and clients. They need to be able to understand the needs and goals of each party, as well as any constraints or limitations that could impact a project. This is especially important when negotiating with vendors and other contractors.
For example, a GC should be able to describe how a change in scope will affect the project’s schedule and budget. They should also be able to clearly outline a payment plan that aligns with the work schedule. They should avoid requesting upfront payment for the entire project. This is a red flag that the GC is not financially stable enough to complete the project. It is also a sign that they may be cutting corners with substandard materials or procedures.
Legal Compliance
In large construction projects, a general contractor often assumes a managerial role while overseeing specialized workers such as masons, plumbers and electricians. This means that the project manager is responsible for ensuring that contractors and subcontractors operate according to the terms and conditions outlined in their contract or Statement of Work (SOW). Typically, the general contractor will ensure that these individuals meet certification requirements and follow established safety guidelines on the job site.
In addition to monitoring the quality of a contractor’s work, a GC will also monitor the company’s compliance with federal employment laws. This includes ensuring that the company does not discriminate against minorities or women by evaluating how well a contractor is meeting participation goals for these groups. For example, a GC may be required to hire a certain number of Hispanic workers in order to meet an affirmative action goal. However, the GC should take steps to ensure that these workers are not being paid less than other employees who are not Hispanic in order to avoid an affirmative action violation.
A GC is also responsible for submitting payroll data to government agencies and ensuring that all taxes and insurance coverage are up to date. In addition, a GC is responsible for obtaining any building permits needed for a project, as well as ensuring that the terms of any product warranties are met.
Most GCs have prior experience as a tradesperson of some kind, working in carpentry, roofing or electrical work. This background gives them the skills to manage complex construction projects. They are also familiar with the materials used for each type of build, as well as how to order them from vendors and wholesalers in a timely manner.
Liability Insurance
Liability insurance is a foundational policy for General Contractors. It offers protection against claims made by third parties for bodily injury and property damage. It also covers wrongful acts such as slander and copyright infringement, which could potentially cost the company thousands in legal fees and settlements.
While there are many other policies that a contractor might need to secure depending on the scope of work they do, the best general contractors start with commercial general liability insurance. Other policy options that a general contractor might consider include builder’s risk insurance (to cover the structures they are building on a project), commercial auto insurance (to protect vehicles used for business), and workers’ compensation coverage to protect employees against injuries on the job.
General liability insurance is a common requirement by clients and project owners. Some contracts may even require proof of insurance before a general contractor can begin working on the project. It’s important for the contractor to choose a policy with flexible terms that can adapt to different projects and requirements.
There are two types of general liability policies: occurrence and claims-made. Occurrence policies offer protection for events that occur during the policy period regardless of when a claim is filed, while claims-made policies offer protection for claims that are made after the end of the policy period.
There are many policies to consider for a general contractor, but the best ones are tailored to your unique business needs and risks. A good policy can help you stay out of bankruptcy court and meet your client’s requirements. Choosing the wrong policy can be disastrous. It’s important to make sure the policy you choose does not contain exclusions that would be catastrophic for your New York General Contracting business. These can range from residential exclusions to action over / scaffold law exclusions.