It’s extremely important to understand the difference between a construction company and a general contractor. This is because the construction of any project—be it residential, commercial, or industrial—is a complex process involving various stages and the participation of different professionals and companies.
Among the main players in this process are construction companies and general contractors. Though often confused, their roles and responsibilities are distinct, and understanding them is crucial to the success of any project.
In this text, we will explore the differences between a construction company and a general contractor, detailing their functions, responsibilities, and when it’s appropriate to hire each. Let’s dive in!
What Is a Construction Company?
Before understanding the difference between a construction company and a general contractor, let’s define what a construction company is. In short, it’s a company specialized in executing construction projects.
It is responsible for the entire construction process, from project design to the final delivery of the work.
Additionally, construction companies generally have their own team of professionals, which can include engineers, architects, site managers, bricklayers, electricians, plumbers, and other specialists necessary to complete the project.
Key Functions of a Construction Company
To better understand the differences between a construction company and a general contractor, let’s highlight the main functions of a construction company:
- Complete project management: The construction company is responsible for coordinating all project stages, including labor hiring, material purchasing, and work supervision.
- Project design: Many construction companies have a team of architects and engineers who design the project based on the client’s needs and preferences.
- Project execution: The construction company takes on the responsibility of carrying out the work according to the agreed schedule and specifications.
- Regulation and legality: Construction companies ensure that the project complies with all current laws, regulations, and building codes.
- Project delivery: Upon completion of the project, the construction company hands over the finished work to the client, usually with a delivery certificate ensuring everything was done as planned.
It’s important to evaluate whether the chosen construction company possesses all these aspects.
What Is a General Contractor?
A general contractor, on the other hand, is a professional or company that manages and supervises the execution of a construction project but does not necessarily have their own team of workers.
The major difference between a construction company and a general contractor is that the general contractor is typically hired by the project owner to act as the main point of contact during construction and to coordinate all aspects of the work.
Key Functions of a General Contractor
Among the primary functions of a general contractor, the following can be highlighted:
- Work supervision: The general contractor oversees the execution of the project, ensuring that all work is performed according to the project’s specifications.
- Subcontractor coordination: Instead of having their own team, the general contractor hires specialized subcontractors, such as electricians, plumbers, and carpenters, to carry out different parts of the project.
- Schedule management: The general contractor is responsible for managing the project schedule, ensuring that the various stages are completed on time.
- Cost control: Although not directly purchasing materials, the general contractor manages the project’s costs, ensuring that the work stays within the established budget.
- Client communication: The general contractor serves as the main communication channel between subcontractors and the client, ensuring that the client’s expectations and needs are met.
To further clarify the difference between a construction company and a general contractor, we’ve prepared a detailed comparison below.
Key Differences Between a Construction Company and a General Contractor
Now that we understand the roles and responsibilities of each, let’s explore the key differences between a construction company and a general contractor:
1. Organizational Structure
This is a fundamental aspect of understanding the difference between the two terms:
- Construction company: Has an in-house team of professionals from various areas of construction.
- General contractor: Works with subcontractors to perform the different stages of the construction.
2. Scope of Work
The second difference is noted here:
- Construction company: Takes responsibility for the entire construction process, from project design to final delivery.
- General contractor: Focuses on supervising and coordinating the project, ensuring that the work is performed by subcontractors.
3. Cost and Material Control
You should also observe how cost and material control are handled between a construction company and a general contractor:
- Construction company: Typically purchases construction materials directly and includes these costs in the client’s contract.
- General contractor: Oversees the purchase of materials, but financial responsibility may lie with the client or subcontractors.
4. Legal Responsibility and Guarantees
Additionally, it’s worth checking the legal responsibility and guarantees as a client:
- Construction company: Provides guarantees of quality and adherence to technical standards, as it is responsible for the entire execution of the project.
- General contractor: Has more limited responsibility focused on supervision, with the quality of work being shared among subcontractors.
5. Flexibility and Control
Depending on your project, having more flexibility may be a crucial factor in your hiring decision:
- Construction company: Offers less flexibility to the client during the construction process, as the company controls all stages.
- General contractor: May offer greater flexibility to the client in choosing materials and directly hiring certain services.
6. Project Size and Complexity
Finally, and no less importantly, you should consider the size and complexity of the project to make a good choice. In this sense:
- Construction companies: are generally more suited for larger and more complex projects that involve extensive coordination and a diverse team.
- General contractor: Can be a good choice for smaller projects or when the client desires more direct involvement in selecting subcontractors.
When to Hire a Construction Company
Hiring a construction company may be more advantageous in certain situations, such as for larger and more complex projects.
Thus, in commercial buildings or multi-unit residential projects, a construction company can offer the structure and expertise needed to manage all stages of construction.
Another situation that sets the construction company apart is when the client desires guarantees of quality and compliance with technical standards, as the company assumes full responsibility for the work.
Similarly, if the client has no experience in project management or prefers to delegate all responsibilities, the construction company can offer a complete solution.
When to Hire a General Contractor
On the other hand, a general contractor may be the best choice for smaller projects.
For renovations or smaller-scale construction, direct supervision and the hiring of subcontractors can be more efficient.
Additionally, if the client wants more control over selecting subcontractors or materials, the general contractor can offer this flexibility.
Finally, for projects with a tighter budget, a general contractor may help find more cost-effective solutions by coordinating different subcontractors.
Conclusion
The decision to hire a construction company or a general contractor depends on the specific needs of the project and the level of involvement desired by the client.
Both roles are crucial in the construction industry, and each offers distinct advantages depending on the context.
While construction companies provide a more integrated approach, overseeing all construction phases, general contractors offer greater flexibility and control to the client, especially for smaller-scale projects.
Understanding these differences is essential for making an informed decision and ensuring the success of the construction project.
