We need to build an additional 3,000 square feet of office space within our industrial building. Our architect is preparing plans now. It seems like a simple enough project, and we are wondering if we can save money by acting as our own general contractor. What would be the advantages or disadvantages of doing so?
Your project is complex enough that I would discourage you from acting as your own general contractor, unless someone in your company has substantial contracting experience. One of the major advantages of hiring a general contractor is the coordination of trades, and you will require enough trades that this could be a serious issue. At a minimum, you will require carpentry, drywall installation, electrical work, HVAC installation, floor covering, and painting. You may also need plumbing, demolition, and sprinkler work. If you have a roof leak, there is nothing wrong with calling a roofer directly, but on a job this complex you need to juggle schedules, paperwork, and competitive bidding, as well as establish clear lines of responsibility. This requires an expert.
So what exactly does a general contractor ("GC") do? Here are five major areas of responsibility:
1. Paperwork - This includes coordination between the architect and the town, following the permitting process and providing information as necessary, obtaining insurance and workman's comp certificates from all the trades, processing drawings and change-orders, procuring sign-offs, certificates of completion and occupancy, logging activities and calls, obtaining capital improvement certificates, and providing updates and status reports. A GC should know his way around the building department, and be able to establish trust and rapport with the building inspectors.
2. Cost control - The GC is responsible for obtaining competitive bids from all the trades necessary on the job. A good GC will be making suggestions to the client and architect on cost-saving measures before and during the project. He will be reviewing drawings and plans for accuracy, and if necessary will provide field measurements to avoid costly change-orders.
3. Field Supervision - A GC will be visiting the property on a regular basis, to inspect and verify the quality of the work by subcontractors, secure the property against vandalism, graffiti, and dumping, coordinate meter readings, set thermostats and alarms, and watch for roof leaks and other properties. In general, he will be acting as the owner's representative, whether it be as a good will ambassador with the neighbors, or meeting with a fire marshal.
4. Coordination of work - One of the most valuable roles served by your GC is coordination of all the work. He is responsible for the finished product, and removes any finger-pointing among trades that you may encounter if you try to coordinate the project yourself. The GC will be drafting work schedules, preparing a "GANTT" chart outlining estimating the duration, materials and labor required for each phase of the construction. There will be unexpected delays or surprises (remember Murphy's Law) and it is the responsibility of the GC address issues as they arise, and keep the project on course.
5. Be Nice - Construction is a headache for the client. Life is too short to be further hassled by a surly GC. Find a reputable GC with good recommendations and references, and also make sure that you like him or her! Your GC is going to be your "partner" for the duration of your project, so pick a GC with whom you can get along!
David G. Hunt, MCR, CCIM, SIOR is the president of and Hunt Construction Services, Inc. and Hunt Corporate Services, Inc. and has provided commercial real estate services on Long Island, New York since 1973. To contact Mr. Hunt, please email david@huntcorp.com, visit the website at http://www.huntcorp.com or call 516 937-1000.
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