When your business is planning to start the process of a commercial construction project, then the first and foremost thing you need to do is to hire the right “commercial general contractor” for the job. Why? Because,
A commercial contractor is the most important person for the project.
A commercial general contractor may be an individual or a Construction company, who has the knowledge, experience, and professional standing to take control, conduct, and complete large to substantial commercial construction projects. They come and take over the project from its planning stages at the earliest point in time.
In the United States, the market size of the Commercial Building Construction Industry has reached a revenue of $230.7 billion in 2023 (IBISWorld). Whatever the nature of your project, be it the development of a shopping mall or a hospital or an industrial structure, you need to find the right commercial contractor. They must have the necessary knowledge and experience in leading and completing large commercial construction projects. Generally, you’ll find –
Two Main Types of General Contractors
Traditional General Contractor
A traditional construction contractor works with the predesigned blueprints and plans that the client has developed with an architect or designer and actualizes them through a high-standard construction process.
Design-Build General Contractor
A design-build general contractor implements both the design and construction aspects of their client’s project under a single contract. They either work with their in-house architects and designers or outsource them to render the design and construction services to the clients.
What Services Can A Commercial Contractor Provide?
A commercial general contractor leads the entire project and oversees the complete construction activity from the project’s start until its completion in all senses. As such, the commercial builder is in charge of managing all phases of the construction and handles the entire range of tasks connected with completing the construction work.
As a commercial general contractor, their work encompasses the entire range of operations required to be undertaken for the successful completion of the project like,
- Preparation of the necessary planning
- Development of civil and structural drawings for the proposed construction
- Determining the structure and elevation of the building with architects
- Procuring high-quality materials and equipment
- Selection and appointment of labor groups and subcontractors to do specific parts of the project
- Vendor management and other related functions for sourcing materials and consumables for the project
- Undertaking all the legal formalities and complying with all the legal and local law formalities
- Handling and obtaining all the legal, insurance, and other licenses and permissions required for the building work
- Dealing with all the financial transactions with the project owner, the subcontractors, the labor force, vendors and suppliers of the materials, etc
- Administration of the construction site and related areas
- Construction management and the actionable items required for this
- Creation and maintenance of communication facilities
- Overall in charge of the project
The commercial general contractor is responsible for overseeing and managing the entire construction from its starting stage to the final finishing stage. They take control of the entire project and are responsible for managing all construction phases and related activities. Commercial contractors take care of each bit and parcel of the project and make the construction complete with all the necessary building components like civil works, electrical and plumbing works, interior and exterior decoration, landscaping, and installation of all the HVAC and safety installations.
Real estate building sector is full of diverse challenges that can affect a project’s outcomes and its stakeholders. For example, cost overruns, labor shortages, inflating costs of materials, safety risks, and unpredictable delays. An experienced commercial contractor is proficient in overcoming major challenges and ensuring that your project finishes within budget and schedule.
Let’s discover their 11 key roles and how commercial contractors carry out various responsibilities throughout a project’s lifecycle.
The 11 Key Roles Of A Commercial General Contractor:
1. Project Planning
The general contractor has to plan their work and plan the tasks of every team and give the teams a timeline to complete those tasks. They need to identify the work that has to be done to complete the project and even estimate the costs to do that work. This planning is very useful as it breaks down the big project into controllable phases. The commercial construction company further divides each phase into interdependent stages. Then each stage is carefully planned and decides the deadline for each phase to increase the efficiency of all the phases and which eventually keeps the overall process on track.
Once the plan is ready, the contractor will communicate the roles to their respective teams, and each member of the team is aware of their role. Once the project’s execution begins, the commercial contractor will review the planned schedules with the actual work happening and make any alterations if there is any deviation between the two. The more detailed and clear the plan is, the better chances of having better control over the costs as the plan’s clarity facilitates efficiency and lesser chances of rework.
2. Human Resources Management
Another main area of the commercial contractor’s main function in a commercial construction project includes human resource management or personnel management. For this, they are responsible for selecting and appointing all types of industry professionals right from the planning stage.
- Commercial building contractors appoint civil engineers to prepare the detailed building planning documents that form the entire construction base.
- They hire structural engineers who design the basic structure of the commercial construction and get the structural diagrams and calculations and all other related diagrams for the proposed work.
- They also appoint architects to plan the commercial construction structure and finalize the final shape and structure of the building.
- Commercial builders also do the appointment of documentation personnel specially trained in the preparation of all types of construction documents.
- Then, the commercial general contractor selects the construction personnel right from the onsite workers, supervisors, managers, and foremen who will build the commercial building.
- Moreover, the commercial construction company also appoints building supervisors and management staff who will be in charge of the day-to-day management of the construction activities besides ensuring legal compliance with all applicable zoning and building regulations.
- In addition to this, the commercial contractor is also responsible for selecting the right building equipment and allied machinery for effective functioning during the progress of the project.
3. Subcontractor Management
All types of commercial construction need different types of subcontractors to do particular parts of the construction work. It is the commercial general contractor’s primary duty to find the right subcontractors who are experts in doing that type of work on the project. They bring in the right subcontractors, help them do the work they are entrusted with, manage them on-site, monitor and supervise their work, so the subcontractors complete their work as a part of the construction team and get paid for the work they perform on the construction project.
The commercial building contractor also appoints and manages a team of building inspectors who are entrusted with the work of ensuring the following of all the quality standards prescribed for the type of construction that is underway. They offer all the facilities for these inspectors to measure, oversee the building construction and suggest changes wherever needed. A commercial contractor also makes necessary appointments for the generation of reports for legal compliance and internal construction management purposes.
4. Finance Management
Towards successful and easy management of finances for the project, the commercial general contractor appoints a team of financial management professionals to take care of all the accounting, bookkeeping, and overall financial management.
As commercial construction is large, financial management may need a complete team of different types of cost and work auditors, finance auditors, and other types of professionals to manage and control the flow of finances and related activities for the efficient management of financing operations of the project. A construction cost estimator forecasts accurate prices for each aspect of the project by utilizing historical data and market conditions.
5. Supply-Chain Management
As the conduct of a large commercial construction project involves the movement of large amounts of men and materials at the right times for the unfettered progress of the work, the general contractor also employs a suitable team of persons for supply chain management and logistics.
This is a specialized team of professionals with special knowledge of ensuring the delivery of the right type of materials at the right times during each phase of the construction, and these persons are entrusted with planning the procurement and modes of transport and delivery at the construction site so that the project proceeds smoothly.
6. Vendor Management
A large commercial construction also needs the procurement of enormous amounts of building supplies, equipment, building materials, consumables, electrical items, HVAC equipment, Ducting materials, plumbing materials and equipment, paints and pigments, safety equipment, furniture, fixtures, etc.
As such, the commercial general contractor has to select the right vendors for the materials to be used in the project, they will be dealing with the production companies directly and their dealers to manage the supplies and ensure that all the materials arrive at the worksite at the right times.
7. Communication Management
Communication is the most vital element that ensures the success of the project. As the person in charge of a large commercial construction project, the commercial contractor ensures that the complete communication infrastructure is in place during all phases. They also select and appoint the right communication team to keep the different units of the project communicating effectively and keep it going throughout for easy, successful, and consistent communication.
Thus, the commercial contractor is the all in all person as far as the project is concerned and has control over every aspect. The commercial general contractor is the first to come into the project and the last one to go out, and during their entire stay, they take care of everything necessary for the successful completion of the project.
8. Quality Management
The commercial contractor recognizes which quality of the material is best suited for the project; the quality selected will be the most durable one. So in the long term, when the commercial space starts operations, its maintenance costs would be much lower. They will order the required materials from reliable suppliers, and will hire a quality control officer to examine the quality of materials received throughout the project; this prevents entry of low-quality and damaged materials for development.
The commercial contractor will make sure that the designers don’t consider very complex designs for the project, instead opting for minimum complexity in the designs. This assists in sustaining high levels of quality in the building designs. The commercial contracting firm will very clearly define the project’s scope, which enables the subcontractors to secure the decided level of high quality across all aspects of the project. Along with the above-mentioned measure, the construction contractor will also examine the subcontractor’s quality of work. All such measures are undertaken by the contractor to meet the client’s quality standards and do their work professionally and efficiently.
9. Dispute Management
The construction contractor needs to make sure every activity is under control and supervision. They are responsible for making sure that the work happens in a disciplined manner. So they become responsible for solving any dispute that happens on the site. The dispute could be among the construction workers, the subcontractors, the third parties involved, the various functions-based teams, or even any dispute with the client. Hence, the construction contractor needs to settle the dispute professionally and fairly.
If the dispute takes quite some time to get resolved, it would surely break the flow of the construction activities, and if still not resolved soon, then it would surely delay the work and increase the overall costs. The commercial building contractor must set up preventive measures to reduce the probability of a dispute and set up a mechanism to solve the dispute in the shortest possible time.
10. Legal and Regulatory Compliance
It’s the responsibility of a commercial building contractor to ensure that your project complies with applicable legal requirements. If your commercial project fails to acquire the necessary building permits, it might have to face negative legal consequences. Usually, a local general contractor is well aware of the building codes and zoning regulations of their operating area, so you can rest assured knowing that the project will be completed to acceptable standards.
The commercial building contractor will submit applications for obtaining building permits and licenses from the Licensing Board. They will accompany the local building inspector at all property reviews and ensure it qualifies for the permits. Reputable commercial contractors are licensed and bonded, meaning they can be held accountable for the damages and accidents under their supervision. Partnering with a commercial builder who is licensed and bonded protects a company from any legal and financial repercussions.
11. Health and Safety Management
About 21.2% of worker fatalities in the U.S. happened in the construction industry in 2020. Hence, it’s one of the fundamental roles of the construction contractor to guarantee health and safety on-site by practising the right measures and training workers. They are in charge of monitoring all the safety features that must be in place on a commercial construction site. For this, they will bring in the necessary safety experts and give them the required permissions and facilities required for the worksite’s safety and security.
Apart from this, commercial construction contractors take care of the equipment’s safe operation. They ascertain that the equipment operators and those who are working near the equipment are adequately protected and adhere to the safety requirements for ensuring workplace safety. If any unforeseen issues or emergencies arise on-site, the GC deals with them and immediately reports them to the clients. Most general contractors have Workers’ Compensation Insurance for their employees, so they are subject to penalties and liable for damage costs if any worker gets injured on-site.
12. Risk Management
When it comes to commercial construction, there is a multitude of potential risks involved in a project, such as safety risks, financial risks, legal or contractual disputes, environmental disasters, or risks related to the project’s quality. It’s the responsibility of a commercial general contractor to develop an effective risk management plan, mitigating negative impacts on the project.
They perform a risk assessment of both current and potential risks. Bigger risks are put on high priority while smaller ones are considered to be less urgent. A contingency plan helps to mitigate problems when they become serious.
As risk management best practice, commercial contractors maintain contract documentation and ensure clear communication between all project stakeholders. They monitor the work quality delivered by the subcontractors and inspect whether it aligns with project specifications. If any dilutes arise, the general contractor has to report and resolve those problems before they escalate.
Conclusion
From initial planning to pre-construction activities and construction management to post-construction quality inspections, a commercial general contractor performs multiple instrumental roles during different stages of the project. As the leader in charge of construction workers on-site, the general contractor provides hands-on guidance to the team members and sees to it that the end product upholds or exceeds client’s expectations. Leveraging their established relationships with vendors and subcontractors, general contractors can help clients achieve quality construction under a restricted budget and timelines. Given the fact that they manage your entire commercial project from the ground up, choose a general contractor who is reliable, experienced, and carries a successful track record.
You can learn about the tips to select the right commercial general contractor in San Francisco.
If you think you would require commercial general contractor services for your commercial project, please feel free to contact us.
FAQs
How much is the fee percentage for a Commercial General Contractor?
Although the commercial general contractor charges depend upon the size of the project, expect to pay around 10% to 20% of your total construction costs.
What’s the difference between a Commercial General Contractor and a Construction Manager?
A general contractor is a business entity hired through a bidding process that physically remains on-site and manages the construction of a pre-crafted design. While construction manager is hired based on qualifications and works on behalf of the client from project design to completion.
What does a commercial remodeling contractor do?
A commercial remodeling contractor undertakes the job of altering the interior and exterior of an existing commercial building. They also manage and oversee the entire construction from the initial phases to the completion.
Relevant Resources:
- Subcontractor Vs Contractor: What Does A General Contractor Do?
- Value Engineering in General Contracting Services
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