Should You Be Your Own General Contractor?
In my position as an extension agricultural engineer and educator,
I work with both builders and dairy farmers (owners) and have asked
this question and tried to answer it from both perspectives. I have
learned from both sides the risks and benefits of the decision. There
is no pat answer for you as an owner. What I would like you to think
about are the issues I am presenting in this article. Answering the
questions may help you understand the risks and benefits of making the
decision to be your own general contractor or hiring a professional
to do the job.
A builder is not a dairy person, and may not have your dairy experience
or know what you want. As the owner, you need to educate the builder
in exactly what you need. That does not mean you have to be the general
contractor to control the project. You as the owner have complete control
over the general contractor.
A dairy person is not a builder, and may not have builder experience.
Do you as a dairy person have the expertise to carry out the multitude
of tasks required to move a project through from start to finish? Can
you order materials, schedule labor and subcontractors, resolve conflicts
between subcontractors, and finish the job on time and on budget?
What are the attributes of a general contractor?
A general contractor (GC) considers the big picture and understands
the building process from start to finish. The GC is detail-oriented
and can decide if a specific change made now will significantly affect
the quality of the job. A GC can think ahead of the current scheduled
work toward the next day’s, next week’s or next month’s
schedule. The GC understands that a mistake in scheduling today’s
work can have a snowballing effect on the future schedule and cause
significant delays in the project completion. The GC is thrifty—he
needs to make a profit to stay in business. Redundancy and wasted material
or labor can eat up profits quickly.
Some might even say that a GC is a “control freak” (in this
case, it is probably a good thing). Someone has to be in control. Some
owners might feel that they don’t have control if they have a GC.
I don’t think this should be threatening to an owner. In fact I
think this gives the owner more control over a project because the owner
directs and controls the GC who in turn controls the project.
What are the responsibilities of the general contractor?
In the project management phase, the GC oversees the project design,
resolves design conflicts, contracts with all the subcontractors, orders
materials, and estimates the project cost. In the construction management
phase, the GC schedules the subcontractors, resolves scheduling conflicts
to keep the job on time, and inspects the work to make sure the next
scheduled work can be done properly.
Another key issue that may affect the decision for an owner to be a
GC is the size and scale of a project. For example, a 100-cow freestall
barn may be considered a small project that could be done in a relatively
short time. It is not a particularly large building, and is a simple
structure with concrete floors and curbs, minimal utilities and equipment.
The dairy owner may only need to work with a few contractors (excavator,
building, concrete, plumbing, electrical), and may be able to coordinate
all the contractors to get the job done on time and on budget.
A major project expansion such as a new 250-cow freestall barn, parlor,
feed storage, and manure storage project has many more contractors,
is more complex, and has a longer time frame. This kind of project can
take a huge time commitment from the general contractor—time the
dairy owner may not have, and may not understand the time commitment
until it is too late into the project to turn it over to anyone else.
What I have learned from owners who did try to be the GC on a major
project was that they sacrificed their family time, business time, and
personal time to save on the project costs.
So how much can you save on a project?
That’s a hard number to nail down, but it is probably in the range
of 10-20% of the project cost. That can be significant money on large
projects, and saving money is one of the main reasons why an owner might
consider being the general contractor. It might be the difference between
keeping the project under or over budget. But are the cost savings worth
it?
What are the benefits of owners being general contractors?
They can save money, and they are in complete control of the project.
What are the benefits of hiring a professional general contractor?
They have the knowledge and expertise in the construction business.
They have experience. They have the time because that’s what they
are paid to do. They have long standing relationships with subcontractors.
When can being your own general contractor work?
On small projects with a short time frame with minimal contractors,
and when you have the time to spend acting as the general contractor
to get the job done on time and on budget.
When should you hire a professional general contractor?
On large complex projects with a long time frame with a large number
of contractors, and when you don’t have the time to spend acting
as the general contractor because you are running a dairy business.
It may sound like I am discouraging any dairy owner from taking on
the challenge of being a general contractor. That is not the case. I
do believe that some owners might like the challenge, are fully capable
of performing the GC function, and can learn on the job for a small
construction project before they tackle bigger projects. For a large
project, the decision to be a general contractor should not depend only
on the fact that it can save you money. It should be a thoughtful decision
discussed with your family and business partners to decide if the cost
savings are worth the time and effort that will be required.
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