A prime contractor is the company in charge of overseeing the completion of a construction or renovation project from start to finish. A project owner hires this company, also known as a general contractor, to oversee the entire construction process. A prime contractor may hire a number of subcontractors to help with the project, but these firms will not be directly contracted with the project owner.
Most construction contracts are awarded after a bidding process in which the project is awarded to the lowest qualified bidder. The owner will award a single contract to a construction firm, which will then serve as the project’s prime contractor. The company is responsible for all tasks necessary to complete the project once the contract is signed. Only tasks that were not included in the contract are the owner’s responsibility. He has the option of doing this work himself or hiring additional contractors to finish it.
The project can be completed in a variety of ways the prime contractor. He has the option of performing the required work with his own employees. He may also employ the services of specialized contracting firms to complete specific tasks. These businesses are referred to as subcontractors because they are hired the primer contractor rather than the owner. They essentially work for the general contractor rather than the owner directly.
In some cases, the prime contractor may not be responsible for any of the work. Instead, he’ll hire subcontractors to finish the job while he supervises it. Construction management is a term used to describe this method of completion.
Subcontractor requirements may be included in the prime contract some project owners. This means that the prime contractor can only hire companies that the owner has approved. Based on the owner’s requirements, the prime contractor may be required to include specific language in the subcontracts. Subcontractors are not considered contractually bound to the owner even in these situations.
The prime contractor is responsible for completing the job according to the terms of his contract with the owner. If he hires subcontractors, he is legally liable for their failures because he is the one who is ultimately responsible for the job. He must stick to the project’s schedule, stay within budget, and complete the job as promised to the owner. When it comes to budgeting, profit, and completing the job according to the contract, he must carefully balance the interests of the owner with the needs of his own company.