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Construction Management vs General Contracting: Understanding the Key Differences

When planning a construction project, one of the most important decisions you’ll face is choosing how the work will be managed and delivered.

This often comes down to the choice between construction management vs general contracting. While both methods aim to complete a project successfully, they differ significantly in approach, responsibility, risk, and flexibility.

Whether you're a property developer, architect, public sector client, or private homeowner, understanding the distinctions between these two delivery methods can help you make the best choice for your project.

 

What Is Construction Management?

Construction management is a professional service that guides and supports the client throughout the entire project lifecycle.

A construction manager is typically appointed early in the process, often before the design is finalised, to provide input on costs, schedules, procurement, and risk.

Unlike a general contractor, who is brought in to execute a completed design, the construction manager acts more as a consultant. They work closely with the client and design team to shape the project before construction begins.

There are two primary forms:

  • Agency construction management: The construction manager advises the client without assuming construction risk. The client holds the contracts with subcontractors.
  • Construction management at risk (CMAR): The construction manager guarantees a maximum price and assumes risk, similar to a general contractor, but is still involved from the early stages.

Construction management offers high levels of collaboration, cost transparency, and flexibility, making it well-suited for complex or phased projects.

 

What Does a General Contractor Do?

A general contractor is responsible for delivering the physical build. Typically, they are appointed once the design is complete and take charge of all construction activities, including:

  • Hiring subcontractors
  • Procuring materials
  • Managing site operations
  • Delivering the project to specification, on time and on budget

The general contractor enters into a single contract with the client and assumes the risk of delivering the project within an agreed budget. This traditional delivery model is well-established and often used for straightforward or cost-sensitive builds.

The main difference in construction management vs general contracting lies in when each party gets involved and how risks and responsibilities are allocated.

 

How Do Construction Management and General Contracting Compare?

Construction management and general contracting differ in several key areas. Construction managers are usually appointed early, often before the design phase begins, while general contractors typically come on board after the design is complete.

The contract structure also varies, with construction management working on a fee-based, open-book arrangement, whereas general contracting usually follows a lump sum or fixed-price model.

Subcontractor relationships are another distinction: in construction management, the client holds trade contracts directly, while in general contracting, the contractor holds and manages those contracts.

Flexibility and transparency are greater under construction management since the scope can be adjusted, and costs are openly visible. General contracting, by contrast, is more rigid, with a fixed scope and less transparency due to closed-book pricing.

Risk allocation also differs, with construction management sharing risk with the client, while general contracting places the risk primarily on the contractor. Collaboration is generally stronger in construction management, where the manager works closely with the design team, compared to general contracting, where collaboration tends to be limited after the contract is awarded.

Overall, construction management allows greater client involvement, adaptability, and oversight, while general contracting offers simplicity and certainty through fixed pricing and a single point of responsibility.

 

When Is Construction Management the Better Choice?

Construction management is ideal when:

  • The project is large, multi-phased, or technically complex
  • Design is not fully developed at the outset
  • The client wishes to be involved in key decisions
  • Early cost certainty is not the primary concern

Benefits of Construction Management

  • Early input helps identify risks and opportunities
  • Budget and schedule can be tracked from day one
  • Flexible procurement options and phased delivery
  • Better communication between all parties

However, the client must be prepared to engage more actively. In construction management vs general contracting, the former requires a greater level of involvement and understanding of procurement and risk.

 

When Should You Use a General Contractor?

General contracting is appropriate when:

  • The design is finalised and clearly defined
  • A fixed price is preferred
  • The client wants limited involvement during construction
  • The project is relatively straightforward

Advantages of General Contracting

  • Predictable costs with lump sum pricing
  • Single point of accountability
  • Easier to manage for clients unfamiliar with construction

But it offers limited flexibility once construction has started. Any changes typically require a formal variation and additional cost. This is an important factor when comparing construction management vs general contracting for evolving or complex builds.

 

What Are the Legal and Financial Considerations?

In construction management:

  • The client usually holds direct contracts with subcontractors
  • Construction managers charge a professional fee, often a percentage of total costs
  • Risk stays largely with the client, unless using CMAR

In general contracting:

  • The contractor takes on the legal and financial risk
  • Pricing is often fixed, based on a lump sum tender
  • Contractors may build in contingencies to protect their margins

Hybrid approaches also exist. For example, a project may begin with a construction manager providing early advice, then switch to a fixed-price contractor for execution. This is increasingly common in large public sector frameworks.

 

What Do Professionals Say About the Two Approaches?

According to the Chartered Institute of Building (CIOB), early contractor involvement—typical of construction management—can lead to better outcomes for complex builds. It allows for innovation, risk mitigation, and smarter procurement decisions.

Meanwhile, the Royal Institution of Chartered Surveyors (RICS) notes that general contracting remains a practical and well-understood model, especially for residential and standard commercial projects.

The debate over construction management vs general contracting is not about which is better overall, but which aligns best with the client's goals, project type, and risk appetite.

 

How Do I Choose Between Construction Management vs General Contracting?

Here are a few questions to consider:

  • Is your project design complete or still developing?
  • Do you want cost certainty or flexibility?
  • How involved do you want to be
  • Is the project complex, phased, or fast-track?

If your answers point towards collaboration, adaptability, and early decision-making, construction management may be the better route.

If you prefer simplicity, cost predictability, and a single point of contact, general contracting might be more suitable.

 

Conclusion

The choice between construction management vs general contracting shapes not only how a project is delivered but how risks, costs, and relationships are handled along the way. Each model has its merits, and neither is inherently better than the other.

Construction management provides an integrated approach, ideal for projects that benefit from early contractor involvement and a flexible delivery structure. General contracting, on the other hand, offers predictability and simplicity when the scope is clear and changes are minimal.

Before deciding, assess your project objectives, timeline, budget constraints, and internal capacity to manage complexity. If you're still unsure, consult with professionals experienced in both models to help you align your choice with your long-term goals.

 

FAQs

What is construction management?

Construction management is a client-focused service that provides expert guidance throughout the project lifecycle, often beginning at the pre-design stage. It helps improve outcomes by advising on cost control, procurement, scheduling, and risk management.

How does general contracting differ?

General contracting starts after the design is finalised and focuses on delivering the physical construction under a single contract. The contractor manages subcontractors, oversees the site, and completes the project at a fixed price.

When should I choose construction management?

Construction management is ideal for complex or phased projects, or when the design is still being developed. It gives the client greater flexibility, control, and visibility throughout the process.

What are the advantages of general contracting?

General contracting provides cost certainty through a lump-sum agreement and places accountability with a single party. It works well for straightforward projects that are already fully designed.

Can both methods be combined?

Yes, some projects use a combined approach by starting with construction management during planning and switching to general contracting for delivery. This gives the client input during early decisions while benefiting from cost certainty later.