Construction Manager vs. General Contractor: What's the Difference?
These two experts manage your project with a slightly different approach
Highlights
Construction managers step in during the pre-construction design phase.
General contractors specialize in the build phase but can also overlap with design.
Both professionals oversee the team of contractors, budget, and timeline.
Construction managers and general contractors relate to their fees and project budgets differently.
Starting a large renovation or new construction project is an exciting time, but it's also a confusing one. Determining who to hire to build your home is a complex answer that often comes down to comparing a construction manager versus a general contractor. The decision not only affects the process but also the overall cost of building a house. Let's place construction managers and general managers side by side to help you decide.
What Are the Main Differences Between Construction Managers and General Contractors?
While there are many similarities, the primary difference between construction managers and general contractors is their relationship to a project. Construction managers join the project much earlier than general contractors. They will collaborate with architects during the design process and oversee initial budget planning, scheduling, and arrangement of construction documents.
During the project, construction managers oversee the team—including a general contractor in some cases—and ensure the project stays on budget and schedule and in line with safety codes.
General contractors are similar to construction managers but typically enter the project later in the game. Homeowners or construction managers hire them after solidifying the design and budget. General contractors will often hire or bring a trusted team of subcontractors. They will work on-site throughout the project, unlike construction managers who may partially manage from afar. In addition to different training and licensing procedures, general contractors also work with different fee structures.
| Construction Managers | General Contractors | |
|---|---|---|
| Cost | 5% – 15% of project cost | 10% – 25% of project cost |
| Licensing/Certification | Certification optional but preferred | Licensure required in most states |
| Hires Subcontractors | Sometimes | Always |
| Manages Site | Sometimes | Always |
| Works with Designers | Always | Not typically |
| Manages Safety Codes | Always | Always |
| Financial Involvement | Advises budge | Responsible for budgetary changes |
| Purchases Supplies | Sometimes | Always |
Differences in Role and Responsibilities
Depending on the specialty of the local general contractor or construction manager that you hire, roles and responsibilities will shift or overlap. In most cases, think of a construction manager as an agent advising on your project and the general contractor implementing the build itself.
Job Overview
When comparing construction managers versus general contractors, both play a role in overseeing the project at a high level. However, general contractors focus on the day-to-day construction on-site, whereas construction managers have a wider scope of work.
In many cases, construction managers coordinate with a larger team of designers and project managers to ensure the big-picture requirements get met. General contractors may bring in a team or work with an existing company. They may oversee a building foreperson and a collection of specialist contractors once the construction begins.
Keep in mind that there can be overlap between the two positions. A general contractor may act as a construction manager if they have the experience. Additionally, some homeowners choose to skip the general contractor and entrust the on-site team oversight to the construction manager.
Timeline
A construction manager typically joins the team earlier in the home building and renovation process than a general contractor. The timeline to build a house typically ranges between seven and 12 months, but the month or two of pre-construction solidifies the budget, timeline, and permits. Homeowners or construction managers may hire a general manager during this time, who will step in during the early build phase through the end of the project.
Budgeting
Early budgeting typically falls to the construction manager and the design team. To build a budget, the group will weigh the options for each part of the house affected by the renovation. Within this budget, the team will account for the cost of a general contractor. They will then send out a request for bids to general contractors interested in working on the project.
Once the team selects a general contractor, they keep close track of the approved budget, tracking possible changes outside the scope of the original plan.
Project and Team Management
More decisions may fall to the homeowner when working with a construction manager, but this also provides more freedom to hire the team of their choice. Both construction managers and general contractors can manage projects depending on their backgrounds.
As for the team itself, general contractors often come with a trusted group of subcontractors they have worked with on other projects. On one hand, this means that the project may take less time due to the relationships built among the team. On the other, it could keep a homeowner from hiring a specialist they had in mind.
Cost Differences
Construction manager fees typically fall between 5% and 15% of the total project cost—the higher percentage range is often reserved for smaller renovations. General contractors, on the other hand, charge between 10% and 25% of the total project cost, or a per-day rate between $300 and $500.
The most important difference, however, is how each professional relates to their fee. In most cases, a general contractor receives a predetermined fee based on the percentage of the proposed project. It’s in their best interest to not let the project go over budget when they choose a team, materials, and design details. If the cost of a home renovation or new construction goes over budget and stays within the scope of the original design, the general contractor ends up absorbing the difference.
Construction managers also work on a set fee but are not as affected by changes in the cost of the project as general contractors. They provide general oversight of the design and the build and help homeowners hire and manage contractors who cover the day-to-day details. While they can advise you on how not to go over cost, they are not responsible for these changes.
Training Differences
General contractors have state- and city-regulated requirements before bidding on a job. In most states, they must receive licensure to work on projects of a certain size. Eligibility for licensure and registration often requires a set number of on-site work, passing a state exam, and obtaining the proper liability insurance.
Construction managers typically study engineering or business management in an undergrad program and may choose to obtain specialty training beyond a bachelor's. Licensure is not required as it is for general contractors, but certifications with professional organizations can make them more desirable to clients.