When contemplating a construction or remodeling project – many homeowners receive “sticker shock” when the prices come in. As a result, in an effort to save money, some are tempted to circumvent the services of a General Contractor (GC) or Construction Manager that will coordinate and manage the job. If a detailed breakdown of costs is given – homeowners often look at the general contractors fees and are tempted into believing that they can eliminate these costs and save money simply by acting as their “own GC”.
To make a professional analogy, this is like acting as your own lawyer. Ever hear how that turns out?
Yes, a general contractor earns money by adding a percentage to the subcontractor’s fees and to the materials on the project. However, the general contracting project delivery scenario will typically not cost the homeowner significantly more money and when all is said and done – it may actually cost less.
Here's why: the general contractor handles all the details from a global perspective including: client contact, negotiations, building permits and inspections, subcontractor bidding, scheduling, materials procurement, and customer billing. A professional GC will get preferential pricing from his subcontractors because they supply them with work on an ongoing basis. The GC is looking out for a homeowner’s financial interests by getting a better deal on the work than the homeowner could get for themselves.
The “General Contracting” process essentially means that the people who are good at "managing the work" do their thing and the people that are good at "doing the work" do their thing. The GC’s Project Manager supervises and schedules the specialty subcontractors to make sure efficiency through specialization is achieved.
In addition to making sure that the right subcontractors are on the job when needed, the GC is also responsible for getting them paid. Immaculate and professional work is rewarded by timely payment. A well-run job with timely requisitions for payment to the homeowner (at predetermined completed work milestones) will ensure that the subs are paid promptly and your job runs smoothly. This scenario is win-win for everyone. The result is that your job is done better, faster and for competitive prices.
When a homeowner elects to “go it alone” and hire individual tradesman to do the work, several things usually happen.
1. The homeowner pays more: Subcontractors will charge homeowners premium prices because they have learned that dealing directly with homeowners is only profitable when the fees are high.
2. The work scope changes & the price goes up: Homeowners are at risk to overpay again when the scope of work changes - and this happens on virtually every job. Whether it's from unforeseen circumstances or homeowners changing their minds, it will happen. This can be a huge "profit center" for a subcontractor because they basically have you locked into a "take it or leave it" negotiating position while your home is torn apart. Just like your auto mechanic!
3. The job takes considerably longer: When multiple subcontractors are involved, things will take longer because the project is not professionally phased and coordinated. Work gets done slowly, out of sequence, or not at all… because subs are not showing up precisely when they are needed.
4. Things go wrong: The possibilities for things to go wrong increase at an exponential rate because it's "every man for himself". No one is taking responsibility for the whole project and for the customer's satisfaction with the complete job. When conflicts arise over building standards, best practices, and possible solutions you may not get the best or most objective advice. One sub can blame another or offer you a remedy that may be in his best interest, but not necessarily yours. A subcontractor’s solution may also not be in the interest of the other tradesmen and could create more unnecessary work for them. Conflicts, contradictions and chaos. Guess who pays for all of this? Once again, no one is looking out for your best interests with respect to the whole project.
5. Problems with materials and supplies: Your suppliers don't deliver or what you received is not what you thought you ordered. If materials are not on the job when you need them – you’ll lose more time. If it was ordered wrong and was custom-made, guess who's paying for these mistakes? If subs are standing around waiting for materials, guess who ultimately pays? A good GC has far more leverage with building suppliers and getting the right products at the right time is his responsibility. And…when it is not right, he’s at risk, not you.
6. Quality Control: While some quality control issues are obvious to all – many are not. How familiar are you with industry standards and general building practices? Arcane issues with technical details and “means and methods” are not usually common knowledge among homeowners. A GC will ensure that your project – including important things hidden in the walls - are done to code and to industry standards.
7. You’re on your own with city officials and building inspectors. Who's going to make sure the inspections are done without holding up the project? If something does go wrong, a GC is far better equipped to resolve building code conflicts by virtue of their experience. Will a bunch of bureaucrats hold you up indefinitely? Will you be running in circles asking your subs for advice? If your subs installed code deficient work, who's going to pay for any inspector mandated changes?
8. Project Coordination issues and delays: When things slow down or go wrong - more of your time and your money are wasted. Are you a skilled negotiator or conflict resolution specialist? What about unreturned phone calls to the subcontractors and broken promises? You already have a full-time job… do you really need more aggravation, more dust, more noise and strangers wandering around your house for who knows how much longer?
9. Peace of Mind: The homeowner often finds themselves completely and utterly frustrated and they can lose their mind, or their marriage, or both! Quite often, after their experiences, many will emphatically say "never again!"
When you have a professional General Contractor or Construction Manager running your project, you can actually SAVE money. Getting a high quality project completed for a competitive price, considerably faster and with less aggravation is a huge plus for everyone I've ever worked with.
In conclusion, most homeowner's simply do not have the time, expertise or patience necessary to really make a construction project go smoothly and affordably. Many may try under the common perception of trying to "save a lot of money". When all is said and done however, only the smallest percentage of homeowners are successful and when you add it all up, even they probably didn't save any money - or enough money - to justify their time and aggravation.... and the job took longer!
In 25 years of being in construction, I have never heard even a single homeowner say: "I ran the job myself, it went exactly as planned and took less time and cost less money then I expected".
James Mitchell III
Design / Builder, Construction Manager / General Contractor, Realtor
Mr. Mitchell has worked for large and small Construction Managers and General Contractors for over 25 years. His writing and work have appeared regionally in: The Boston Globe, The Boston Business Journal, Banker & Tradesman, The New England Real Estate Journal, The Boston Society of Architects Chapter Newsletter and Nationally in: Engineering News Record, Ladies Home Journal, and Yankee Magazine.
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