industrydif.com A General Contractor typically oversees the entire construction project, managing subcontractors and ensuring timely completion within budget, while bearing direct responsibility for the work's quality and safety. Construction Manager at Risk (CMAR) assumes a preconstruction advisory role, collaborating with the owner during design to identify potential risks and provide cost estimates before committing to a guaranteed maximum price. Choosing between these approaches depends on project complexity, risk tolerance, and the desired level of owner involvement in decision-making.
Table of Comparison
| Criteria | General Contractor (GC) | Construction Manager at Risk (CMAR) |
|---|---|---|
| Role | Executes construction based on design and contracts | Provides pre-construction input and manages construction risk |
| Contract Type | Fixed-price or lump sum | Guaranteed Maximum Price (GMP) |
| Involvement | Primarily during construction phase | Involved from design through construction |
| Risk Responsibility | Limited to construction scope | Assumes risk of cost overruns above GMP |
| Cost Control | Less input in pre-construction budgeting | Active in cost estimating and value engineering |
| Collaboration | Works primarily with owner and architect | Collaborates closely with owner and design team |
| Selection Basis | Usually lowest bid | Based on qualifications and negotiated GMP |
Understanding the Roles: General Contractor vs Construction Manager at Risk
A General Contractor oversees the entire construction project, responsible for hiring subcontractors, managing schedules, and ensuring compliance with design specifications. A Construction Manager at Risk (CMAR) participates early in the design phase, providing cost estimates, risk management, and collaboration to control budget and timeline while assuming financial risk for construction costs. Understanding these roles helps project owners choose between a traditional delivery method led by a General Contractor or an integrated approach with a CMAR that offers enhanced project transparency and cost accountability.
Key Responsibilities in Project Delivery
General Contractors oversee the entire construction process, managing subcontractors, procurement, and on-site operations to ensure project completion within schedule and budget. Construction Managers at Risk engage early in project planning, providing pre-construction services like cost estimating and risk assessment while assuming financial responsibility for delivering the project at a guaranteed maximum price (GMP). Their collaboration with owners and design teams throughout design and construction phases enhances risk mitigation and quality control.
Contract Structures and Risk Allocation
General Contractor contracts typically involve a fixed-price agreement where the contractor assumes full responsibility for project execution and cost overruns, transferring substantial risk to the contractor. Construction Manager at Risk (CMAR) agreements use a Guaranteed Maximum Price (GMP) contract structure, where the construction manager provides cost savings incentives and shares some financial risk if the project exceeds the GMP. Risk allocation in General Contractor contracts is more contractor-centric, while CMAR promotes collaborative risk sharing between owner and manager to optimize project outcomes.
Decision-Making Authority and Collaboration
General Contractors typically hold primary decision-making authority on-site, coordinating subcontractors and ensuring project execution according to plans and schedules. Construction Managers at Risk actively collaborate with owners and design teams during preconstruction, providing input on cost, schedule, and constructability while sharing project risks. The choice between these roles affects project control dynamics and the degree of early-stage collaboration, impacting overall project outcomes.
Cost Control Strategies and Budget Management
General Contractors typically use fixed-price contracts that transfer cost risk to the contractor, enabling strong budget predictability but less flexibility for scope changes. Construction Managers at Risk engage early in the design phase, providing pre-construction services such as detailed cost estimating and value engineering to enhance cost control and reduce contingencies. This collaborative approach allows for continuous budget monitoring, early identification of potential overruns, and adaptive cost management throughout the project lifecycle.
Project Timeline and Scheduling Differences
General Contractors typically follow a traditional project timeline where design completion precedes construction, leading to sequential scheduling phases. Construction Managers at Risk engage early during design, enabling overlapping design and construction activities that often accelerate project delivery. This collaborative approach allows for proactive schedule adjustments and risk mitigation, optimizing timeline efficiency.
Risk Management Approaches
General Contractors often assume financial and operational risks by managing subcontractors directly and ensuring project completion within agreed timelines and budgets. Construction Managers at Risk commit to delivering the project at a Guaranteed Maximum Price (GMP), sharing cost overruns while providing early collaboration during design and preconstruction phases. This risk-sharing approach incentivizes proactive problem-solving and cost control, reducing potential disputes and enhancing project predictability.
Owner Involvement and Communication
Owner involvement in a General Contractor (GC) model is typically limited during the construction phase, with primary communication channeled through the GC, who manages subcontractors and project execution. In contrast, Construction Manager at Risk (CMAR) offers enhanced owner collaboration through continuous input during pre-construction and construction stages, allowing for early cost estimation and risk mitigation. This increased owner engagement in CMAR facilitates transparent communication, enabling proactive decision-making and alignment of project goals.
Benefits and Drawbacks of Each Method
General Contractor (GC) offers a single point of responsibility and often lower initial costs, but may limit early contractor involvement and collaborative planning. Construction Manager at Risk (CMAR) provides increased early-phase collaboration and better cost control through Guaranteed Maximum Price (GMP), though it can involve higher fees and more complex contractual arrangements. Selecting between GC and CMAR depends on project complexity, budget flexibility, and desired level of contractor engagement during design.
Choosing the Right Approach for Your Construction Project
Selecting between a General Contractor and a Construction Manager at Risk hinges on project complexity, risk tolerance, and control preferences. General Contractors typically offer fixed-price bids with clear scopes, ideal for projects with well-defined designs, while Construction Managers at Risk provide early involvement and cost transparency through guaranteed maximum price contracts, suited for projects requiring collaboration during design phases. Evaluating schedule flexibility, budget certainty, and stakeholder communication needs ensures the optimal delivery method aligns with project goals.
Related Important Terms
CMAR (Construction Manager at Risk)
Construction Manager at Risk (CMAR) assumes the risk of delivering a project within a guaranteed maximum price (GMP), providing more cost certainty compared to a General Contractor who primarily executes work based on contracts without price risk. CMAR engages early in design phases, enabling collaboration with owners and architects to optimize construction planning, mitigate risks, and control budgets effectively.
Guaranteed Maximum Price (GMP)
A General Contractor typically provides a fixed bid or lump sum contract without a guaranteed maximum price, assuming full risk for cost overruns, while a Construction Manager at Risk (CMAR) offers a Guaranteed Maximum Price (GMP) that caps project costs, transferring budget risk to the CMAR. The GMP model promotes cost transparency, collaboration during design, and potential savings shared between owner and CMAR, differentiating it from traditional General Contracting methods.
Preconstruction Services Agreement
A General Contractor typically assumes full responsibility for construction execution under a fixed-price contract, while a Construction Manager at Risk (CMAR) provides preconstruction services including cost estimation and scheduling to mitigate risks during the design phase. The Preconstruction Services Agreement with a CMAR outlines these early collaborative tasks to enhance project planning and budget control prior to construction commencement.
Agency Construction Management
Agency Construction Management involves the construction manager acting as an agent for the owner, providing expert oversight without bearing financial risk, unlike a General Contractor who assumes direct responsibility for construction contracts and project delivery. This model allows for greater transparency and owner control during project execution, contrasting with the Construction Manager at Risk approach where the manager guarantees a maximum price and holds contractual risk.
Progressive Design-Build
Progressive Design-Build integrates the General Contractor and Construction Manager at Risk roles by involving contractors early in the design phase, enhancing collaboration and risk management through shared responsibilities. This method optimizes project delivery by aligning design and construction processes, reducing cost overruns, and accelerating schedules.
Self-Performance (Self-Perform Work)
General Contractors and Construction Managers at Risk both engage in self-performance, but General Contractors typically handle a broader scope of self-perform work including carpentry, concrete, and site work, leveraging in-house crews for better quality control and schedule adherence. Construction Managers at Risk usually self-perform specialized tasks, focusing on trade work that complements subcontractor efforts to optimize cost efficiency and risk management during project delivery.
Lean Construction Delivery
General Contractor typically assumes full responsibility for construction execution, optimizing workflow through traditional project delivery, while Construction Manager at Risk (CMAR) integrates early collaboration and risk management to enhance Lean Construction delivery by minimizing waste and improving value. CMAR's involvement during design phases facilitates continuous improvement and pull planning, aligning with Lean principles to drive efficiency and reduce project costs.
Integrated Project Delivery (IPD)
General Contractor roles in Integrated Project Delivery (IPD) prioritize collaboration by executing contracts and managing subcontractors, while Construction Manager at Risk (CMAR) offers pre-construction services and guarantees maximum project cost, balancing risk and cost control. IPD enhances project success by integrating CMAR's early involvement and cost predictability with the General Contractor's focus on construction execution and schedule adherence.
Subcontractor Default Insurance (SDI)
Subcontractor Default Insurance (SDI) provides a financial safety net primarily leveraged by Construction Managers at Risk (CMAR) to manage subcontractor performance risks, differing from General Contractors who typically rely on traditional bonding methods. SDI enhances project continuity by covering subcontractor defaults, reducing delays and cost overruns in complex construction projects.
Fast-Track Project Delivery
General Contractors typically assume full responsibility for project completion, coordinating subcontractors and managing schedules to meet fast-track delivery demands. Construction Managers at Risk provide early involvement in design phases, offering cost control and risk mitigation strategies that enhance efficiency in accelerated project timelines.
General Contractor vs Construction Manager at Risk Infographic
