Construction projects can be overwhelming, especially when deciding who should oversee the work. Many project owners struggle to choose between a general contractor (GC) and a construction manager (CM). A poor decision can lead to delays, unexpected costs, and mismanaged resources. Studies show that early planning and the right professional can save up to 20% in project costs and reduce construction delays significantly.

This article will discuss the differences between a general contractor and a construction manager. You will learn about what does each professional do, and when to hire them. How their responsibilities, contracts, and risks compare and the pros and cons of each role to help you make the right choice

By the end of this guide, you will clearly understand whether a GC or a CM is the best fit for your project. Making an informed choice can save money, reduce stress, and ensure a smoother construction process.

What is a General Contractor?

A general contractor (GC) is the person or company in charge of building a project. Once the design is finished and approved, the general contractor verifies everything gets built correctly, on time, and within budget. They hire and manage workers, order materials, and coordinate different tasks to keep the project moving.

General contractors are usually hired after the planning and design phase is complete. The project owner looks at contractors’ bids and picks the best price and timeline. Once hired, the GC signs a contract that makes them responsible for completing the agreed-upon project.

This contract outlines essential details like the total cost, deadlines, and quality standards. If something goes wrong—like delays, mistakes, or budget overruns—the general contractor is responsible for fixing it. This means they significantly take on a lot of financial risk if they underestimate costs or run into unexpected problems.

Pros

General contractor handles everything. They act as the single point of responsibility, eliminating the need of multiple subcontractors, suppliers, or unexpected problems.

Another advantage is that GCs work with a fixed budget. When owners hire a GC, they agree on a set price for the entire project. This gives the owner cost certainty, reducing the risk of unexpected expenses. If materials or labor costs increase, the GC must cover those costs, not the owner.

General contractors also have strong relationships with subcontractors. Because they regularly work with electricians, plumbers, and other specialists, they can hire skilled workers quickly and often get better prices on materials and labor. This can help the project stay on schedule and within budget.

Cons

One major drawback of hiring a general contractor is the lack of transparency. The owner does not always know the exact costs of labor and materials because the GC handles the budget. Since the GC makes a profit by keeping costs low, they might select cheaper materials or cut corners to increase their earnings.

Another risk is cost overruns. Even though GCs work with a fixed price, unexpected changes can lead to extra costs. If the owner wants to do adjustments during construction, the GC might charge high fees for those changes. These “change orders” can add up, making the project more expensive than expected.

What is a Construction Manager?

A construction manager (CM) is like a project owner’s trusted advisor who assists plan and oversee a construction project. Instead of physically building the project, a CM manages budgets, schedules, and teams to ensure everything runs smoothly. They work closely with the owner from the beginning, offering expert guidance before construction starts.

During the pre-construction phase, the construction manager helps with important decisions. They review designs, estimate costs, create schedules, and plan how to get the best materials and workers. This early involvement helps avoid expensive mistakes and delays.

Once construction begins, the CM oversees the project, so the work is done correctly and on time. They coordinate between the owner, architects, and contractors, solving problems before they become serious issues. Unlike a general contractor, who hires workers directly, a CM supports the owner choose the best subcontractors but doesn’t employ them.

Construction managers are usually paid through a fixed fee or a percentage of the total project cost. This means they don’t make extra money by cutting corners or saving on materials, which keeps their interests aligned with the owner’s. However, the owner takes on more financial risk since they pay for all project costs directly rather than having a fixed price like they would with a general contractor.

Advantages

Construction manager works on cost transparency. Unlike a general contractor, who works with a fixed price, a CM shares all cost details with the owner so that the owner knows how much is spent on materials, labor, and other expenses. Because of this open approach, the owner can find ways to save money and avoid hidden costs.

Another benefit is early project involvement. A CM joins the project during the planning phase, helping with design, budgeting, and scheduling before construction starts. This early guidance control significant issues and makes the project more efficient. Since the CM is involved from the start, they can adjust plans to fit the budget rather than making expensive changes later.

A construction manager also offers flexibility. Since they do not work under a fixed contract, they help the owner go for the best subcontractors and materials without being locked into one option. This allows the owner to hire high-quality workers and make changes without extra costs.

Disadvantages

Unlike a general contractor, a CM does not offer a lump sum price for the project. Instead, they charge a fixed fee or a percentage of the total cost. While this approach gives more transparency, the owner doesn’t know the final cost upfront. If expenses rise, the owner has to cover them.

The owner takes on more financial risk. The GC is responsible for handling unexpected cost increases with a general contractor. However, with a construction manager, the owner pays for all project costs directly. If the price of materials increases or delays happen, the owner must find extra money to cover these costs. This makes budgeting harder, especially for large or complex projects.

General Contractors Vs Construction Managers

General contractors (GCs) and construction managers (CMs) play essential roles in construction, but they work differently.

Project Involvement

A general contractor joins the project after the design is finished. The owner picks a GC based on bids, and the contractor fully controls the construction process. The GC does not influence design decisions. They follow the approved plans and do the job.

A construction manager, however, gets involved much earlier, often before the design is complete. They work alongside the owner and architects, helping to make important decisions about materials, costs, and schedules. Because they start early, they can stop costly mistakes before construction begins.

Responsibilities

The general contractor is responsible for building the project. They hire subcontractors, order materials, and manage the work on-site. Their job is to execute the construction plan and deliver a finished project.

The construction manager does not build the project themselves. Instead, they oversee and coordinate the process, ensuring everything stays on track. They act as the owner’s advisor and project manager, offering guidance instead of physically handling the work.

Risk & Liability

The GC takes on most of the financial risk with a general contractor. They agree to complete the project for a set price. If costs go up due to mistakes or delays, the GC has to cover the extra expenses. This protects the owner from unexpected costs and means the GC might cut corners to stay within budget.

With a construction manager, the owner takes on more risk. The CM is paid a fee to manage the project, but the owner is responsible for all project costs. If costs increase, the owner must cover them. However, since the CM works transparently, the owner can see where every dollar goes.

Contract & Payment Structure

A general contractor usually works under a lump sum contract. The owner agrees to pay a fixed amount for the entire project. If the GC saves money, it keeps the extra profit. If costs go over budget, they take the financial hit.

A construction manager works for a fixed fee or a percentage of the project cost. Their payment does not depend on cutting costs, making them more focused on quality and efficiency than profit.

Cost Control & Transparency

A GC controls the budget and does not always share detailed cost breakdowns with the owner. Since they work under a fixed-price contract, they might look for ways to save money and increase their profit—sometimes at the expense of quality.

A CM provides full transparency because the owner pays all costs directly. This allows the owner to choose materials, negotiate better prices, and have more control over the budget. However, it also means the owner bears more financial risk if unexpected costs arise.

Factors to Consider

Before making a decision, owners should think about:

• Project Complexity: A GC may be the best choice if the project is simple and has a clear plan. If the project is large or complicated, a CM can help manage the details.
• Budget Flexibility: A GC provides a set price, making budgeting easier. A CM offers more transparency, but costs may change throughout the project.
• Owner’s Experience: Hiring a GC is easier if the owner has little construction knowledge. A CM allows for better decision-making if the owner wants more control and understands construction.

How to Decide Which Professional is Right for Your Project

Choosing between GC and CM depends on the type of project, budget, and how much control the owner wants. Each professional has a different way of handling construction, so making the right choice can save time, money, and stress.

When to Hire a General Contractor

A general contractor is the best choice when the project is fully designed and the owner wants a fixed price before construction starts. Since the GC handles everything from hiring workers to ordering materials, this option is ideal for owners without construction experience or who don’t want to be involved in day-to-day decisions.

General contractors are also a good choice for projects with strict deadlines because they take full responsibility for completing the job on time. However, since the owner has less control over costs and materials, this approach works best for people who trust the GC to make decisions.

When to Hire a Construction Manager

A construction manager is better for complex projects that need careful planning and flexibility. Since a CM gets involved early, they help with budgeting, scheduling, and design decisions before construction starts. This is useful for owners who want to make cost-saving choices and adjust plans.

Hiring a CM makes sense when an owner has some experience with construction or wants to be more involved in the process. Unlike a GC, a CM doesn’t take full financial responsibility, so the owner must be comfortable managing costs and handling unexpected expenses. However, this approach offers more transparency and control, which can lead to better quality and cost savings in the long run.

Wrap Up

The selection between a general contractor vs a construction manager is one of the most crucial decisions in a construction project. Both professionals help bring a project to life, but they work in different ways. A GC takes full responsibility for building the project, offering a fixed price but less transparency. A CM provides expert guidance from the start, giving the owner more control but also more financial risk.

Before deciding, owners should carefully assess their needs, experience, and risk tolerance. Every project is different, so professional choice who aligns with the project’s goals is essential. If you are unsure which option is best, consult an expert to find the right path for your construction project.