• A “general contractor” is a company with which the customer/owner directly enters into a contract for the execution of certain orders. Some or all of the tasks listed are then subcontracted to other companies (subcontractors) for execution. For a general contractor relationship to exist, there must be three parties: a principal, an independent contractor, and a subcontractor appointed by the independent contractor. The status of the independent contractor changes to that of a general contractor when part of the work is subcontracted to another company. A general contractor or GC in a construction project is the party responsible for planning and monitoring the day-to-day activities of a construction project. General contractors are responsible for managing the project from groundbreaking to completion and providing materials, labour and equipment. For large projects, the general contractor is usually a construction company or developer that manages projects for many clients. If the project is smaller, the general contractor may be an individual. In fact, the general contractor in residential projects is often an experienced “jack-of-all-trades” who not only manages the task at hand, but physically performs it himself.
To illustrate this point, let`s take the example of roofers. Often, when an existing roof needs to be repaired or replaced, a roofing company can be hired directly by the owner to do the work. In this case, this roofer would be the direct (general) contractor. On the other hand, if the project is commercial, new construction and the roofer is hired by the general contractor who oversees the entire project, then in this case, the roofer would probably be a subcontractor. Typically, a general contractor is hired by the owner or site manager, who serves as a direct extension of the owner. General contractors then hire specialized craftsmen or subcontractors to handle more specific aspects of the project, such as plumbing, concrete, and electrical work. General contractors are not always required to send a preliminary notice (to obtain their privileges) about their projects. In fact, CCs are more likely to receive preliminary notice, as it is preferable to send a preliminary notice to all higher-level parties, including the GOC and owners. For projects that require this level of project management, the general contractor usually submits a quote or project proposal detailing the planning, cost, and details of the project`s work. Often, creating these proposals requires significant effort on the part of the contractor, which requires removing the quantity and material from the project specifications to create detailed cost estimates.
When preparing these cost estimates, the contractor considers and invoices for materials, equipment rental, work, offices, insurance costs, workers` compensation and time. General contractors who perform work for government agencies are often referred to as “prime contractors.” This term is also used in contexts where the customer`s direct contractor has the right to subcontract or circumstances are likely to involve subcontracting to specialized operators, e.B. in various public services. Typically, the general contractor is the person or company that manages all aspects of day-to-day operations on the job site. They are responsible for the construction of the building. General contractors have their own employees, who typically fulfill the roles of project manager and site manager. Often, a GC has some of its own workers and carpenters who “do” work on the project themselves, but general contractors almost always use a variety of specialized subcontractors who do 80-90% of the work. The GC serves as a project manager who coordinates the work of subcontractors and serves as a link to communicate with the owner or architect about project activities. In the case of public projects, the general contractor is usually responsible for providing the payment guarantee for the project. (The same payment guarantee is available to other project participants, against whom they can assert a bond claim in the event of a payment issue.) Since the GoC is the party providing the payment bond for a public project, it is not in a position to make a bond claim against the same bond […].