Construction Manager vs. General Contractor – Part 6 – Logistics, Owner/Vendor Coordination

In this final part, I cover logistics and coordination between the GC/CM and your vendors along with my recommendation.     

Pros of General Contractor (GC) construction logistics:

  1. Simplified Procurement: With the GC in charge of construction, the procurement process for materials and equipment is simplified.
  2. Single Point of Responsibility: The GC takes on the responsibility for coordinating construction activities, reducing the risk of coordination problems.
  3. Improved Scheduling: The GC can better manage construction schedules and adjust activities as needed to meet project deadlines.

Cons of General Contractor (GC) construction logistics:

  1. Lack of Early Coordination: The GC’s construction work cannot be coordinated in the early stages of the project, leading to potential risks to schedule and budget.
  2. Site Logistics and Access Issues: Issues such as temporary access and site logistics are not addressed until the GC is retained, creating potential risks.
  3. Hidden Costs: The GC’s construction documents (CDs) may not be 100% accurate, leading to hidden costs.
  4. No Budgeting: The GC may not provide a comprehensive budget, making it difficult for the Owner to understand the cost implications of the project.
  5. No Pre-Purchase of Long Lead Items: The GC may not pre-purchase long lead items, leading to delays and increased costs.
  6. Cost Savings Not Passed Along: The GC may not pass along cost savings to the Owner.
  7. Sub-Par Subcontractors: The GC’s subcontractor pool may be sub-par, leading to poor workmanship and quality issues.

Pros of Construction Manager (CM) construction logistics:

  1. Early Coordination: The Construction Manager can coordinate construction logistics in the early stages of the project, reducing the risk of schedule and budget impacts.
  2. Improved Access: The Construction Manager can work with the Owner and design team to ensure that temporary access and site logistics are properly planned and executed.
  3. Enhanced Communication: The Construction Manager can act as a liaison between the Owner, subcontractors, and design team, improving communication and reducing the risk of coordination problems.

Cons of Construction Manager (CM) construction logistics:

  1. Increased Cost: The Construction Manager’s fee may include a premium for their coordination services, leading to increased overall project costs.
  2. Responsibility: The Owner may bear some of the risks for construction coordination problems, as the Construction Manager may not have as much control over subcontractors.
  3. Complexity: The Construction Manager form of contract may require a greater understanding of the construction process, leading to increased complexity.

Coordination with your vendors is particularly important because you as the owner/tenant will have numerous vendors that must be integrated and coordinated into the schedule. They may include IT, Audio Visual, Furniture, Signage, and kitchen/pantry items, among a few. Further, there may be construction, finishes, mechanical, plumbing, and electrical requirements that must be coordinated by your GC/CM.   

Pros of General Contractor (GC) Owner-Vendor Coordination:

  1. Single Point of Responsibility: The GC takes on the responsibility of coordinating with vendors and suppliers, reducing the risk of coordination problems.
  2. Improved Scheduling: The GC can better manage construction schedules and adjust activities as needed to meet project deadlines, including coordination with vendors.
  3. Simplified Procurement: With the GC in charge of procurement, the Owner only has to communicate with one entity, simplifying the procurement process.
  4. Experience and Expertise: The GC brings experience and expertise to the project, helping to ensure that procurement and coordination are done efficiently and effectively.
  5. Improved Contract Management: The GC can better manage subcontractor and vendor contracts, helping to ensure that the project stays on budget and on schedule.

Cons of General Contractor (GC) Owner-Vendor Coordination:

  1. Adversarial Relationship: The inherent adversarial relationship between the GC and other project stakeholders (Owner, PM, Architect, Engineer, Vendors) may lead to conflict and negatively impact the project outcome.
  2. Dependent on Construction Documents: The quality and completeness of the construction documents and specifications are critical to the GC’s ability to accurately coordinate and build the project with minimal change orders.
  3. Schedule: The GC’s lack of coordination with your vendors may impact the project schedule, causing delays and potentially increased costs.

Pros of Construction Manager (CM) Owner-Vendor Coordination:

  1. Improved Communication: The CM serves as a liaison between the Owner, contractors, subcontractors, and suppliers, and owner vendors improving communication and coordination among all parties.
  2. Reduced Risk: The CM can help to mitigate project risks by ensuring that all parties are working together effectively and efficiently.
  3. Independent Oversight: The CM provides independent oversight of the project, helping to ensure that the Owner’s interests are protected.
  4. Expertise: The CM brings technical expertise to the project, which can be especially useful in complex projects or those requiring specialized technical knowledge.

Cons of Construction Manager (CM) Owner-Vendor Coordination:

  1. Increased Coordination Effort: The CM must coordinate with multiple parties, including the Owner, contractors, subcontractors, and suppliers, increasing the effort required to manage the project effectively.
  2. Conflicting Interests: The CM may have conflicting interests with the Owner, as the CM is paid a fee for services rendered and may not have the same level of motivation to minimize project costs.

Final Thought and Next Steps

Deciding between a Construction Manager or General Contractor is complex with many factors to consider. 

Luckily you don’t have to go it alone. Retaining an Owner’s Representative can help you through the entire project process.

The Owner’s Rep will help:

  • Review and Analysis of Contracts: They review and analyze the contracts submitted by contractors to ensure that they are fair and favorable to the owner and that they align with the project requirements and budget.

  • Negotiating Terms: They can negotiate the terms of the contracts, including pricing, schedules, and payment terms, to ensure that the owner gets the best possible deal.

  • Identifying Risks: They can identify potential risks and liabilities in the contracts, and work with the contractors to mitigate them.

  • Protecting Owner’s Interests: They act as an advocate for the owner and ensure that their interests are protected throughout the negotiation process.

  • Providing Expert Advice: They bring their expertise and experience to the table and provide the owner with expert advice on how to negotiate the best possible contract.

By having an owner’s representative involved at inception, even before the real estate broker is retained, the owner can have confidence that their interests are being protected with the best possible representation.


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