What is a general contractor (GC)?

The general contractor: definition and delimitation

To understand what a total contractor does, we need to differentiate him from the classic general contractor.

The crucial difference: The planning

The general contractor (GC) builds what an architect (whom you have hired separately) has planned.

The general contractor, on the other hand, takes care of both: planning AND construction .

• The general contractor model: You have one contract with the architect and one with the general contractor. If there are problems (e.g., the plan is wrong), the architect and the general contractor argue. You are caught in the middle.
• The TU model: You only have one contract with the general contractor . They employ the architect and engineers (either in-house or as subcontractors). If the plan is flawed, it's solely the general contractor 's problem . You're off the hook.

A general contractor therefore owes you a turnkey project, including all project planning. He is the sole captain of the ship.

How does a general contractor work?

The process with a general contractor often begins very early. You approach the general contractor with a vision or a plot of land . They conduct feasibility studies, design the building, obtain the building permit, and finally construct it .

The general contractor thus combines all the necessary expertise. He is your single point of contact. Whether a power outlet is missing or the roof is leaking – the general contractor bears 100% of the responsibility .

The advantages: Why building owners rely on a general contractor

The decision to use a general contractor is usually made out of a desire for security and efficiency.

1. Minimizing interfaces

The biggest advantage of building with a general contractor is the elimination of interfaces.

In traditional construction, the transition from the architect (planning) to the construction company (execution) is a critical phase. This is where mistakes happen and additional costs arise.

With a general contractor , the planner and the builder are part of the same team. The general contractor optimizes the plans from the outset with regard to construction costs and feasibility. There is no blame game between the planner and the tradespeople, as the general contractor is liable for both.

2. Cost certainty and adherence to the budget

A general contractor often offers a fixed price for the entire project very early on. Because they control the planning, they can manage the cost risk better than a pure general contractor.

For you, this means : You sign a contract with the general contractor and know the final price. The risk of planning errors that lead to additional costs lies with the general contractor , not with you.

3. Guaranteed appointment

Because the general contractor controls everything, they can parallelize processes. They can organize the excavation while the detailed planning for the interior fit-out is still underway.

A general contractor often contractually guarantees a fixed move-in date. Theoretically, delays caused by poor communication between the architect and site manager do not occur with a general contractor , as these are internal issues.

4. Low personal effort

If you have a demanding job, a general contractor is the most convenient solution. You don't have to organize architectural competitions or mediate disputes on the construction site. The general contractor delivers the finished product to you.

The disadvantages: The price of security

Of course, the general contractor model also has its downsides. You buy security with certain limitations.

1. Loss of architectural control

If the architect is employed by the general contractor , he primarily serves the economic interests of the company.

In the classic model, the architect is your trustee, enforcing your wishes against the construction company.

With a general contractor, the architect is part of the system. They will propose solutions that are easy and inexpensive for the general contractor to build, not necessarily the most architecturally sound. Individual design can suffer when working with a general contractor .

2. The "Black Box" of Costs

A general contractor will quote you a fixed price. You often don't know the details of how much money goes into planning, how much into the concrete, and how much into the general contractor 's profit. flows .

Transparency is often lower with a general contractor than with an architect-led project, where you see every contractor's invoice. You also pay a risk premium, which the general contractor factors in for assuming overall responsibility.

3. The "concentration risk"

You're putting all your eggs in one basket. If your general contractor files for bankruptcy, your entire project will come to a standstill – from planning to construction.

Since the planning rights often also lie with the general contractor , it can be difficult to continue the project with someone else. A credit check is therefore crucial when choosing a general contractor .

4. Dependency on changes

Once the contract is signed, the general contractor holds the upper hand. If you want to make changes during construction (e.g., different tiles), the general contractor dictates the price for this change order. Since you can't simply switch suppliers, change orders with a general contractor are often expensive.

When does it make sense to hire a general contractor?

The general contractor model is not ideal for every project.

The general contractor is ideal for you if:

• You have a large, complex project and want to minimize the risk.
• You prioritize absolute cost certainty (budget security) above all else.
• You don't have the time or inclination to get involved in the details of the planning.
• You primarily view the project as an investment (profit-making property).

A general contractor is rather unsuitable if:

• You want to build a unique architectural masterpiece with great attention to detail.
• You want to be able to make flexible decisions during construction.
• You want maximum transparency regarding the costs of the individual trades.

Contractual aspects with a general contractor

If you choose a general contractor , the contract is your most important tool.

Since the general contractor provides both planning and execution, the "construction specifications" must be extremely precise . The general contractor is not obligated to do anything not included in the contract .

Make sure that the planning rights (copyright to the plans) transfer to you in the event of insolvency or contract termination. Otherwise, you may own the land, but you won't be allowed to continue building the house designed by the general contractor with another company.

Conclusion

A general contractor is the most powerful partner you can have on a construction project. They take all the worries out of planning, permitting, and construction management. The general contractor transforms the complex construction project into an orderable product with a price tag.

However, this concentration of power requires trust and oversight. Anyone who engages a general contractor largely relinquishes the role of active participant and becomes a consumer. The advantages of minimizing interfaces and pooling liability are enormous, but must be weighed against the loss of transparency and flexibility. Thoroughly vet your potential general contractor before signing any contract.

If you are unsure whether a TU's flat-rate offer is competitive or how the quality compares to other providers, Loft offers neutral data and market analyses to help you make your decision.

Glossary

• General contractor (GC): A company that handles both the planning (architecture/engineering) and the entire construction of a building. The general contractor is the client's sole contractual partner .
• General contractor (GC): A company that only undertakes the execution, based on plans that the client has received from an external architect.
• Subcontractors: Tradespeople and specialists who are hired by the general contractor to carry out parts of the project.
• Planning liability: The responsibility for the accuracy of the plans. In the case of a general contractor , this lies with the company; in the general contractor model, it lies with the external architect.
• Turnkey: The condition of the building upon handover by the general contractor , ready for occupancy, according to the contractual building description.