What is a general contractor?

As a rule, the general contractor (GC) performs all construction work required to erect a structure. In most cases, the structure is built on a turnkey basis (turnkey construction). This form of construction contract—a type of contract for work and services—is referred to as a general contractor agreement.

Unlike a sole contractor, the general contractor has agreed with the building owner that it may subcontract (part of) the work to subcontractors or sub-contractors. However, this does not change the fact that the general contractor is the building owner’s sole contractual partner and bears full responsibility for the overall performance.

The general contractor, in the strict sense of the term, must perform at least a portion of the construction work in-house; the remaining work may be subcontracted. Design services, however, are not included in the scope of the general contractor’s services.

In a general contractor agreement, construction work is often put out to bid on a functional basis. Compensation under a general contractor agreement is typically calculated on a lump-sum basis.