Construction Managers Versus General Contractors: The Inside Scoop
By Scott Spector September 23, 2013 6:00 am
reprintsMy clients often come to me with the same age-old questions: Should they hire a construction manager (CM) or a general contractor (GC)? And, right after that, which do I prefer to work with? Before I discuss my preference and why, let me start with a simple definition of each.
A construction manager is typically brought into the project from the get-go, becoming a partner early on. The CM is responsible for nearly every phase of the construction program, fielding bids and presenting them to the team, managing the job and crunching numbers. The CM works hand-in-hand with subcontractors and suppliers, overseeing their work and devising ways to add value and keep costs in check. Working with a CM allows for a higher level of transparency, as they provide preliminary real-time budget estimates to the project team throughout the design and build-out process, minimizing surprises and allowing for necessary adjustments along the way. Though that does not necessarily mean a cost savings (though sometimes that is the case), the CM’s upfront information provides a measure of comfort and assurance for tenants, facilities directors and companies alike.
In contrast, a general contractor is usually brought on after a full set of finished architectural and engineering drawings have been created. The GC then bids out the various aspects of the job and presents the tenant with one final, tangible number—a complete package deal. Some building owners and landlords find it best to work with a GC with whom they have an established relationship, particularly if it’s for a block of prebuilt office spaces or for in-house turnkey projects. In these instances, the GC may have its own subcontractors and engineers they are familiar with and, based on the sheer volume of work, may be able to secure advantageous pricing and consistently good work.
Now that you have an understanding of how one differs from the other, you may wonder: Can they both be successful? Of course. After all, a CM can do any job a GC can do and vice versa. However, it’s definitely worth taking the extra time to explore what would work best for a given project. For the real estate broker, the costs of a build-out are one of the key elements that can help cement a deal and one of the major line items that matter most to a client when making decisions about the affordability of an office move.
Whether we’re working on a core and shell infrastructure assignment or an interior design project, the answer to the “CM versus GC debate” really boils down to one thing: how you prefer to work. So, while the majority of the time, I lean toward the CM model, which has worked well for us, that doesn’t mean that it should always be the go-to. That’s a decision the client, whether landlord or tenant, needs to make on a case-to-case, project-by-project basis.
