Understanding the Role of a General Contractor: The Backbone of Construction

Behind every successful construction project is a general contractor (GC), also known as a head contractor, who manages stakeholders to deliver a project on time and within budget. On the flip side, poor management by a general contractor often results in blown budgets, disorganised workflows, and poor-quality work. Let’s take a closer look at how a GC role is invaluable in construction. 

What is a General Contractor?

A general contractor is a commercial entity that a client or project owner has hired to construct a project from its inception to completion. They ensure that a project is built to plan and is within schedule, working closely with the client, design teams, engineers, consultants and subcontractors.  

Types of Construction Projects: Residential, Commercial & Industrial

Head contractors in Australia frequently work across different types of projects in the construction industry, each with its own unique characteristics and complexities. These types include:

Residential

Projects related to homes, such as building new houses, renovations, extensions, and apartments. Head contractors in this sector might manage subcontractors like carpenters, electricians, plumbers, tilers, and painters.

Commercial

Commercial covers the construction of buildings used for business purposes. Examples include office buildings, retail, shopping malls, hotels, and restaurants. Head contractors involved in commercial projects often oversee a broader range of specialised trades, such as those specialising in fire services, acoustics, and heritage conservation, depending on the project's specific requirements.

Industrial

Focuses on large-scale construction projects related to manufacturing, production, and energy. Industrial projects can include factories, warehouses, power plants, and processing facilities. Head contractors on these projects often coordinate with a large number of subcontractors and specialised trades, sometimes managing hundreds of workers.

There are instances where the general contractor has a lean business model and has in-house trades and design teams. Clients would engage this type of GC for a Design & Construct project where they have one point of contact to manage design and construction, as opposed to a Design-Bid-Build project where the client engages both an architect/design entity and a build entity separately.

While the scale and scope of projects may vary across these types, the core responsibilities of a head contractor remain consistent: managing subcontractors, overseeing timelines and budgets, ensuring quality control, and acting as the key liaison between the client and all other parties involved in the project.

General Contractor Licensing Requirements

In Australia, GCs must have a builder's license to operate. Regulations and licenses vary from state to state so it is important general contractors uphold regulations as set out by the state they operate in. The specific trades or subcontractors must also have a license to operate within their state. For example, a plumber needs a plumbing license, an electrician requires an electrical license and so on. This ensures that all stakeholders, project owners, contractors and councils are protected and construction projects are regulated. 

For details on applying for a general contractor license across Australia, visit:

New South Wales: ABLIS Business

Victoria: Victorian Building Authority 

Western Australia: WA.Gov

Queensland: QBBC

South Australia: SA.Gov

Tasmania: Consumer, Building and Occupational Services

Northern Territory: ABLIS Business

What Does A General Contractor Do?

Tendering as A General Contractor

General contractors are central to the construction tendering process as they respond to client proposals by preparing competitive tenders. Competing with other contractors, they will analyse project proposals and estimate costs and project timelines by engaging subcontractors and suppliers. The GC reviews the costs received from their own subcontractors' and suppliers' bids and submits a consolidated proposal to the client. They must strike a balance between time, cost and quality to ensure they can win the tender but still deliver on time and within budget. 

Preconstruction

Once they’ve won the tender and before the build commences, a general contractor is responsible for: 

• Forecasting and lead times, highlighting any risks or delays that may arise. 
• Engaging subcontractors to complete specific tasks.
• Working with the architect and design team to ensure the project is buildable. 

 It will remain the GCs responsibility to mitigate and manage risks to ensure the project stays on schedule and within budget.

During Construction

Without effective management by the GC, whole projects get blown out of budget and timelines can be delayed.  During the build, the general contractor is responsible for: 

• Ensuring the project is being built to plan. 
• Delivering the project on time.
• Sticking to the budget.
• Identifying risks that may arise and problem-solving.
• Communicating across all stakeholders, ensuring clients, consultants, architects and subcontractors know where the project is sitting. 
• Scheduling inspections throughout a project to ensure it is built to regulation standards. 
• Paying subcontractors and tradesmen on time. 

Post Construction

As the project comes to an end, the GCs responsibility shifts towards ensuring smooth project completion and handover: 

• Managing any payment issues that may arise. 
• Conducting final inspection and finalising paperwork for the handover to the client. 

How Payments Work for General Contractors

General contractors typically don’t have the financial capacity to pay the entire project until completion, they need regular payments to cover their own costs and pay subcontractors. It’s common for owners to obtain financing from a bank or other institution which allows them to make monthly payments to the GC based on progress claims outlined in the contract.  This avoids being met with additional financial challenges and ensures a steady cash flow for the general contractor, allowing them to manage expenses, pay subcontractors, and maintain project momentum. 

How Leading GCs Are Using Technology

There are many moving parts to a project, so it’s important to have complete visibility and clear communication across. Leading GCs are using centralised platforms for construction management to ensure transparency, one source of truth for all stakeholders and improved collaboration. Here are some of the benefits they’re seeing:

1. Enhanced Scheduling and Timeline Management

Integration of tools like Microsoft Project with project management software is essential. It can connect scheduling data with other project aspects, such as budget, resources, and communication. This helps proactively manage workflows and ensure projects stay on track.

2. Streamlined Financial Management

Cash flow and monthly payment processes are critical for GCs. Integrating accounting software with project management platforms can create a unified system where financial data is automatically updated and accessible in real-time, enabling general contractors to make more informed decisions. This creates a single source of truth with accurate cost tracking, timely payments to subcontractors, and a clear understanding of project profitability.

3. Improved Collaboration and Communication

The value of technology comes to the fore in connecting project stakeholders, from the general contractor and project manager to subcontractors, architects, and the client. Integrated software solutions can serve as a central hub for communication, document sharing, and real-time updates, improving transparency and accountability across the project team. This streamlined flow of information helps prevent misunderstandings, reduces delays, and fosters a more collaborative and efficient working environment.

4. Increased Efficiency and Accuracy

By automating tasks such as scheduling, financial tracking, and communication, software frees up GCs from manual processes, allowing them to focus on higher-level decision-making and problem-solving.

Software also minimises the risk of human error, leading to more accurate estimates, reliable schedules, and well-managed budgets.

5. Data-Driven Insights

Many software solutions offer analytics and reporting capabilities that provide valuable insights into project performance. General contractors can use these insights to identify trends, spot potential risks, and make data-driven decisions to optimize project outcomes.

The Evolving Role of General Contractors in Modern Construction

As the construction industry continues to evolve, general contractors will face new opportunities and challenges. Despite these changes, they will continue to be the backbone of any construction project. To be successful, general contractors must remain adaptable and keep up with the latest technologies, construction advancements and industry best practices. With the integration of project management software streamlining communication and workflows, GC’s will be able to effectively navigate changes, improve efficiencies and meet the evolving needs of their clients. By embracing these changes, general contractors will continue to drive successful projects. 

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