The construction industry stays afloat for several reasons. The main one being that owners request projects to be built. These projects can be the simple backyard shed or a 50 story hotel. No matter if you are a sub-contractor or a general contractor you require one simple thing to continue in business – owners. But let’s not forget the rest of our team.
An owner is described as the instigating party. In other words they have a desire or demand for something to be constructed. The owner can be a corporation, a homeowner, a government agency, Private individual, or Public entity. They have a program in mind that, as the idea develops, gains it’s own set of requirements. The owner alone can not, at least in most cases, perform all the necessary functions to get a project to a bidding stage. To overcome this they hire architects and engineers to take their program requirements and design a structure that most closely accounts for all the requirements.
Architects and Engineers
Architects and engineers are considered to be the “design team” acting on behalf of the owner. The design team can wear many different hats in the relationship between themselves and the owner.
They can be strictly a design oriented team, or they can provide full service to the owner by way of submittal reviews, punchlist, and project coordination. The design team can act as a construction manager for the owner or even partner with a contractor in a design build relationship with no direct connection to the owner. No matter what the capacity the design team is involved in – their main goal is to complete a design that fits the specific requirements of the owner.
Once the design or a phase of the design has been completed the owner can begin to accept bids for the project. If the contractor has already been selected then they can begin to accept bids for subcontracted portions of the work.
The general contractor, or prime contractor, will typically hold a contractual relationship with the owner. This relationship is much the same as the design team relationship – to complete the project and fit it as closely as possible with the requirements of the owner.
In addition to meeting the owners design requirements the contractor is also responsible for completing the project on time, at budget, and at the quality specified. With fast track projects this is becoming more and more difficult – shortening the length of the contract and increasing the complexity.
The General Contractor is responsible for the day to day management of the construction site. This includes, but not limited to, subcontractor coordination, problem solving, political management, making sure subcontractors and suppliers are being paid on time, and managing the best interests of the owner. For the most part the general contratcor also needs help in completing these tasks. The help can be found in subcontractors.
In most cases the subcontractor or tradesman will contract directly with the general contractor. In order for the subcontractor to get the job they will typically bid the job against several other same trade contractors. The trade contractor will enter into a mutually binding contract between themselves and the general contractor. The contract will specifically call out what exactly is expected of that subcontractor, the time frame they have to perform the work, the budget needed, and the quality required.
The subcontractor, besides the owner, could possibly be the most needed element in any project. The subcontractor will typically perform over 80% of the work on a project. It’s therefore absolutely necessary to select the best subcontractor at the best price (not necessarily the lowest cost).