General contractorGC

A general contractor is the builder. The developer owns the project and arranges its financing; the general contractor is the company that turns drawings into a building. It hires and coordinates the specialized subcontractors for excavation, concrete, framing, plumbing, electrical, roofing, and finishes, manages the construction schedule, runs the job site, handles inspections, and takes on responsibility for cost and quality under its contract.

The contract form matters. Under a fixed price or guaranteed maximum price contract, the contractor absorbs cost overruns within its scope, and charges a fee that reflects that risk. Under a cost-plus contract, the developer pays actual cost plus a fee and carries more of the risk itself. Lenders usually prefer a guaranteed price, backed by a bond or a guaranty, so they know the construction loan is sufficient to finish.

The contractor's own overhead and profit are part of hard costs, as are the general conditions: site supervision, temporary utilities, fencing, equipment, and insurance for the duration of the job. Because these run by the month, schedule delays raise the contractor's cost even when no extra work is done.

Contractor capacity is one of the constraints on how much housing a region can build. When many projects compete for the same subcontractors and crews, bids rise, and that shows up in rent through hard costs. Rules that limit who can work on a project, including prevailing wage requirements, change the labor pool a contractor can draw on and the price it must bid.