What is a self-perform general contractor and why should your firm consider working with one?
The terms “self-perform” and “in-house labor” are used by some general contractors to describe the services they offer, but what do these terms mean and, more importantly, how does an architect or owner stand to benefit by hiring this type of general contractor for a project? Let’s explore.
Self-perform defined. By definition, a general contractor is responsible for the day-to-day oversight of a construction site, management of vendors and trades, and the communication of information to all involved parties throughout the course of a building project. If we focus on the portion of the definition which relates to “management of vendors and trades,” we get to the heart of the terms “self-perform” and “in-house labor.” When a general contractor employs a team of craftspeople and manages the performance of their work, this is what is meant by “self-perform” or “in-house labor.” The opposite of this would be when a general contractor outsources the work by hiring a team of subcontractors, and is then responsible for managing that team throughout the lifespan of a project. Fitting between self-perform and the use of subcontractors is a hybrid scenario, where the general contractor subcontracts out certain trades (e.g., mechanical, electrical, and plumbing) and self-performs the remainder. While there is no right or wrong as to how a general contractor chooses to manage and/or perform various trades, there are certainly some benefits for an architect or owner to know about, as it relates to self-perform or in-house labor:
- Nimbleness and control. One of the main benefits a self-perform general contractor can offer is the nimbleness and control of assigning tradespeople to a construction project. If, for example, the project requires an extensive amount of painting, to keep the project on schedule the general contractor may assign extra painters to help out, and can do so at a moment’s notice. Here, the general contractor is in complete control, and there is no need to contact a painting subcontractor and go through the process of asking and/or negotiating for additional people to be put on the project if, in fact, they have them available to begin with.
- Coordination and harmony. Another advantage of having a team of assorted trades working together from one project to the next: They already know each other and how best to get the work done. It’s like a baseball team that has played a number of seasons together, where the shortstop knows instinctively how to toss the ball to the second baseman, so the second baseman can throw the ball to first base and execute a double play. In the world of construction, this all lends itself to having a certain amount of coordination and harmony on the job site, which are often unspoken attributes for a general contractor to possess.
- Finish ahead of schedule. By using a self-perform general contractor, there is the potential to have the project finish ahead of schedule. Here’s an example: Suppose you have a multi-room private residential project which requires a full-gut renovation. As the work progresses from demolition to framing to hanging drywall to painting, etc., what typically happens with subcontractors is that one trade will complete their portion of the project before another trade comes on the job site. While this may keep things somewhat orderly, it doesn’t help the project move along any faster than it could. Instead of waiting for all of the drywall to be hung from one room to the next, a self-perform general contractor can bring in their painting crew and have them start taping and plastering in the rooms where the drywall has been hung. There’s no need to wait. If this can happen from one stage of the project to the next, theoretically, the project could finish sooner than expected. Another way to think about it: Consider the mass production of a product versus custom-made. With mass production, a steady stream of products are made one after another in a very timely and efficient manner. With custom-made, products are made one at a time, which requires more time and there’s less efficiency. When considering this aspect of self-perform, it should not be inferred that quality needs to suffer, because it doesn’t.
- Lower labor costs. When it comes to the cost of using a self-perform general contractor, prices should be more advantageous for the architect or owner, because there is no middle man to factor into the project’s cost, as would be the case by using subcontractors.
- Increased site safety. Another benefit a self-perform team offers is site safety. A self-perform team would know the general contractor’s requirements and guidelines for safety that much more than a subcontractor, so chances are the job site would be less prone to having accidents.
Management is key. While I have provided several benefits for using a self-perform general contractor, one item an architect or owner should be aware of is how well the self-perform team is managed. Here, I am referring to whether or not the contractor has the resources and tools necessary to properly manage its in-house team. For all the benefits that have been given, many of these cannot be realized if the team is not managed well and given the tools and resources it needs to properly perform its respective trades.
In summary, to know the many benefits a self-perform general contractor can offer, it’s certainly in an architect’s and owner’s best interest to explore the opportunity to collaborate with one and see if it makes sense given a project and its scope of work.
Roger Marquis has practiced business development in the AEC and design industries for the past 10 years. Prior to this, he managed business development and marketing at his own company, where he manufactured, marketed, and sold nautically-styled travel accessory bags. Roger is active in his local CoreNet and SMPS chapters. Connect with him on LinkedIn.