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When starting a home remodel or new construction project, you will probably hire a general contractor. A general contractor is a professional who is qualified to take a set of building plans and construct them as outlined. The general contractor may help perform the day-to-day building, or they may just hire workers and oversee all the work activities. In either case, the job of the general contractor is to see that your project gets built.

When you have a building project, ask for bids from various contractors. The bids tell you how much each will charge and what their scope of work will be. Once you have selected a bid, you sign a contract with that general contractor outlining the specifics of the project and the milestones during the project when they will receive payment installments. Once the contract is official, the general contractor will bring in their crew to begin construction. The contractor will manage the workers and subcontractors (anyone who doesn’t work directly for their company but that they need to outsource, like a marble installation pro), order all the materials, obtain work permits, and confirm that all the workers and subcontractors are completing their projects as planned. They typically handle all the payments to the workers and subcontractors, and send you invoice. For all these reasons, it’s also especially important to follow a few smart hiring practices when it comes to finding a general contractor.  If you are organized and competent to oversee construction projects, and are able to make sure everything is being built properly and meeting code, it’s possible you can be your own general contractor.  

Construction project managers help in all stages of your construction project, starting from the very first step. Typically paid a percentage of a total project cost, they are part of the design and planning process and help ensure seamless communication between the design parties and the construction team. According to the U.S. Department of Labor, their scope of work includes preparing cost estimates, budgets and work timetables; interpreting and explaining contracts and technical information to other professionals; reporting work progress and budget to clients; collaborating with architects, engineers and other construction pros; selecting subcontractors and scheduling and coordinating their tasks; responding to work delays, emergencies and other problems; and ensuring compliance with legal requirements, building and safety codes, and other regulations.

The work of construction project managers may seem very similar to that of general contractors, but there are some critical differences. One difference is that, unlike most general contractors, project managers are not engaged in the actual construction — they are onsite overseeing the work of subcontractors. Another key difference is that project managers are hired during the design phase, while general contractors are hired after plans have been made. The project manager is generally paid a percentage of the total project cost, while the general contractor is more typically paid according to the bid they gave to build your project.  

It’s important to know if your project requires work by a licensed professional, as licensing laws can vary by state, locality, and job details. You can find general licensing information online at the government websites that handle occupational licensing for a given profession in your state or location. Some states designate a project cost over which you have to hire a licensed contractor. To find qualified licensed contractors, search your state’s licensing board. For example, in California, the Department of Consumer Affairs operates a searchable database through the Contractors State License Board. In some states, contracting licenses are provided at a regional level. You can find links to specific databases on BRB Publications’ Occupational Licensing page. Red flags that a contractor may not be licensed or may be providing an expired or false license number are unreasonably low bids or a request for complete payment upfront. For more, check out our tips for smart hiring on Thumbtack.

You may choose to hire a construction project manager for your residential or commercial project. For the hands-on homeowner who wants to be involved in home construction but isn’t comfortable hiring subcontractors, a construction project manager can oversee these relationships and supervise labor. Typically, construction project managers charge a fee that is a flat percentage of the total construction project cost. This may range from 10 percent to 15 percent, depending on the company and the services they provide. This means a $30,000 home remodel project would have a construction project management fee of $3,000-$4,500. Hiring a construction project manager generally precludes the markup on subcontractor labor charged by a general contractor. The drawback to this choice is that, unlike a general contractor, the construction project manager won’t be financially responsible for the work of the subcontractors. For larger projects, you may hire a construction project manager who will also hire a general contractor. This provides the benefits of the general contractor along with the management services of the project manager, who will be on board from the beginning. The construction project manager will be involved in the design phase and work with the architects and the building crew, facilitating a smoother overall process.

For more, check out our tips for smart hiring on Thumbtack.

A commercial contractor provides similar services as a residential general contractor but specializes in working with large-scale projects for businesses, schools, nonprofits, governments and development firms. When researching commercial general contractors, review their portfolio of work and confirm they have ample experience working in the area you need. For example, if you are building a small strip mall, ask if the contractors have experience successfully incorporating all the needed elements such as a parking lot, meeting ADA requirements, accessing the proper permits, and completing work on time.

Once you’ve identified several qualified candidates, request bids for your project and then compare the scope of work with your needs and budget. Your commercial general contractor should oversee design, permitting, construction, materials purchase, and adherence to building code and zoning regulations, as well as sticking to an agreed-upon budget and schedule. It’s important to establish clear communication with your future commercial general contractor, as this will mean a smoother process for everyone. For all these reasons, it’s also especially important to follow a few smart hiring practices when it comes to finding a general contractor.