General Contractor – Prime Contractors in Construction

10:05 May 2023
General Contractor

A general contractor by definition is a prime contractor that is the main general construction management expert in the new construction or renovation of their chosen building types.

The general contractor is the project manager for institutional, industrial, commercial, and residential construction building types.

They are also known by a number of additional service titles names, such as building contractors, builders, and construction contractors.

These titles essentially mean the same thing, but carry a slightly different cultural meaning for their roles in commercial construction than in residential construction.

The general contractor’s principal role is to orderly facilitate the construction commencement through the completion of a new construction project or a major renovation project to an existing property.

They are responsible for the scheduling and coordinating of all work activities required to successfully complete the assigned project.

In addition, they are responsible for maintaining construction document control, vendor contracts & insurance, and the overall quality control of the building.

The motivations for using a general contractor are varied and numerous.

Although the typical reasons are associated with larger and more complicated construction projects that require a higher level of technical experience, a money lenders requirement, a defined timeline to complete, and the owners attempting to mitigate the financial risk of runaway cost.

The typical alternative to hiring a general contractor for residential projects is to do it yourself (DIY). If the owner does not have the proper experience, attempting a DIY can result in additional unexpected costs, construction errors, or worse a major catastrophe.

The money that was thought to be saved by the owner doing the project on their own often is consumed by mistakes, resulting in the project costing far more than if they had hired a general contractor.

To better understand the building contractor’s roles, responsibilities, and the nature of their services, we will begin by defining the different types of general contractors that offer commercial construction services and residential contracting services.

Following the following link will provide further insights about Marwood Construction’s general contracting services

Learn about What General Contractor Duties are in Construction and the Risk Exposures are During Contracting

General Contractor

What are the Different Types of General Contractors?

  • Commercial General Contractors
  • Residential General Contractors
  • Construction Management Companies

As already defined general contracting is a business of expediting the labor, material, and equipment to build improvements to an owner’s property.

A general contractor can be generally defined as either being self-performing contractor or prime contractor using subcontractors.

A self-performing contractor hires employees to perform the labor, while prime contractors hire subcontractors to perform the labor and manage their contract, insurance and quality performance.  

The other categorically describing factor of a general contractor is defining them by industry sector.

There are commercial general contractors and residential general contractors. Although their roles and responsibilities are similar, the types of buildings and compliance codes are significantly different.

Commercial General Contractors

Commercial general contractors provide general contracting services to owners of commercial properties such as restaurants, office buildings, warehouses, retail strip centers, and big box stores.

There are also institutional commercial contractors that build schools, manufacturing facilities, airports, bridges, and the such.

We will refer to the light commercial general contracting services for the sake of this discussion.

Commercial construction requires the knowledge and experience of more than conventual construction practices.

Commercial contracting requires the knowledge of commercial construction codes such as life safety and ADA handicap necessities.

Most commercial construction also requires fire suppression systems including fire alarms and fire sprinklers.

Commercial general contracting services also include major civil infrastructure improvements as well such as earthwork, drainage retention & structures, and public parking.

To learn more about the benefits of hiring a commercial contractor visit our link.

Due to the general public access to commercial properties, there is a far greater need for construction document control and interaction with municipal building departments.

Commercial general contractors need to stay up to date on energy and MEP code changes that are more extensive than the residential building codes.

To learn more about commercial construction general contractors follow this link.

Residential General Contractors

General contracting in residential construction is not as clearly defined as in commercial construction.

There are many residential general contractors known by other title names such as home builders and remodeling contractors.

When a home builder or remodeling contractor takes on a project that involves multiple trades and supplies labor and material, this is considered general contracting.

Home builders, home contractors, and remodeling contractors can work as both self-performing and prime general contractors.

In the scope of this article, we will refer to the residential general contractors as luxury builders, luxury home builders, builders, and remodelers.

Since Marwood Construction’s business specializes as a Houston luxury home builder, we will use this service title.

So, Marwood Construction is Houston’s general contractor, we are also Houston builders and Houston luxury home builders.

As Houston builders, we are responsible to our owners for the aforementioned general contracting roles and responsibilities.

Because we are luxury home builders, we are also accountable for curated services that include designing change requests and details omitted from architectural drawings like floor layout patterns, millwork reveals, and special locations for lighting and vents.

Because luxury home building is a one-of-a-kind custom product, luxury builders are required to meet with the owners to review almost every detail of the luxury home building.

That includes everything from the placement of the foundation on the building lot to the color of the electrical switch covers.

Luxury home building is a highly customer-sensitive business that dictates that Houston builders spend a generous amount of time with the owners throughout the entire design and construction process.

For more detail about our luxury home building services please follow the link.

Project Management Company

The distinctive difference between a general contractor and a project management firm is in the contractual relationship between the parties.

The general contractor usually conducts business as a prime contractor with the property owner at risk to the profit that is projected.

They in turn will hire each separate trade contractor as a subcontractor to the prime contract agreement based upon a defined scope of work and exact construction budget.

In contrast, the project management company operates for a fee structure for the owner in the interest of the project.

The project management company provides administrative management responsibilities to the owner for making payments, administrating progress lien releases, and insurance enforcement as named insured.

There are several reasons that owners might select the project management company instead of the traditional general contracting company.

The first is that the project is so unique that the fixed price bid is not appropriate for the owner to accept.

A second common reason is that the owner wants to have more control in the project performance without the construction management duties.

The project management company is also responsible for originating the required building permits, compliance progress inspections, and the final inspections and closing out the permit. 

Not completing these tasks can result in many unwelcome issues in the future for the owner.

Another essential responsibility of the project management firm is the effective and efficient scheduling of the proper subcontractor in a sequential and logical progression.

Many owners do not understand the importance of an orderly and progressive nature of scheduling subcontractor performance.

There are many issues associated with the improper scheduling of progressive work.

The first is that if the work is incomplete or out of sequence the cost of these tasks will increase due to many return trips.

In addition, not inspecting the completeness or quality of each formal work task can cause issues in workmanship to be required to be redone.

This in turn causes additional expenses for the subcontractor that must redo their work because of the previous subcontractors’ corrections.

Poorly executed schedules can also cause subcontractors frustration resulting in subcontractors walking off jobs, major scheduling delays, and poor overall job site quality from lack of subcontractor morale.

One last major benefit worthy of noting is that a professional building contractor makes a significant contribution to the owner as a trusted adviser.

If hired for the right reasons a building contractor will more than pay for themselves.

This is due to the professional and proper project execution resulting in saving the owner personal time, insulating the owner from unforeseen risk, and eliminating the need to redo completed workmanship and poor design that could have been avoided.

Benefits of a Certified Licensed General Contractor

The only real advantage of not using a general contractor is to save money on your home project investment.

So, the question you may ask yourself is, is it worth the savings to me to be my own building contractor?

To answer this question, you must understand what the building contractor actually does as well as the associated risks with these responsibilities.

Texas does not require the licensing of a general contractor.

The State of Texas does require licensing for plumbers, electricians, and mechanical contractors to provide proof of proficiency and pass an exam of minimum standards and trade building codes.

This provides a higher confidence of competency and an additional source of authority oversight.

Building contractors should continue to increase their education and stay current with new laws and required building code updates to be effective in their services.

Texas may not require licensing certification, but this would provide a method to enforce the essential business prerequisite for maintaining the highest standards in the industry.

What then are the benefits in Texas if the general contractors are not required to be licensed?

One of the most effective ways to determine a building contractor’s competency is by openly discussing their experience.

A seasoned building contractor should have a long list of completed projects to share with his qualified prospects.

These projects should reflect a similar design and quality equal to the home design or improvements to meet your expectations.

It is important to discuss the construction methods and practices of their past projects to determine a Houston builder’s knowledge, passion, and business acumen.

General Contractors

General Contractor Risk

There are an unlimited number of inherent systemic and non-system risks associated with the Houston general contractor business model.

A building contractor is required to either retain expert advisers or be experts in such specialty fields as finance, contract law, lien laws, and the fundamentals of all trade contracting.

Not maintaining a higher level of risk mitigation can cause the most talented construction experts to fail.

It is for this reason alone that warrants the use of a qualified building contractor instead of doing it yourself.

Another major factor is the time required to manage the many moving parts of a construction project.

As a nonprofessional, it will take you much more time than an experienced builder.

A Houston general contractor mitigates much of the construction risk through the contract process.

The construction performance standards and material specifications are carefully defined in the building plans, engineering, and proposal/contract terms, and conditions.

If properly structured these conditions can provide a specific and controlling framework for narrowing risk.

In addition, proper insurance can considerably reduce the risk of non-systemic occurrences.

One of the greatest risks of general contracting that many owners do not take into consideration when undertaking a construction project is risk of compounding errors.

Compounding errors result from a subsequent stage of construction resulting in quality noncompliance and the proceeding construction improvements continuing these errors.

For instance, this occurs when a foundation is formed ” out of square ” or out of level and the framer follows the foundation without making the required adjustments.

By the time the home project is completed half of the trades work is not in compliance with best practices and tolerance standards.

The substandard quality performance has been compounded by the results of the non-conforming foundation performance affecting the stage of construction improvements.


As Houston builders, we aspire to provide our clients with relevant knowledge and quality workmanship in a timely manner at a competitive price.

Luxury home building is a demanding and risky business for Houston builders and their owners.

Open and transparent communication is the best practice for both parties to mitigate risk and successfully negotiate and manage the complexities of commercial contracting and luxury home building.

Comments are closed.