12 Aug What Is the Difference Between a General Contractor and a Construction Manager?
A general contractor (GC) holds the primary contract for construction and is directly responsible for building the project, while a construction manager (CM) acts as an advisor or agent who oversees the project on behalf of the owner without necessarily holding the trade contracts.
Why It Matters
Choosing between a GC and a CM structure affects project cost, risk allocation, schedule control, and owner involvement from preconstruction through closeout. The wrong delivery method for a given project type can result in budget overruns, adversarial relationships, or reduced transparency during construction.
In markets like Nashville and Middle Tennessee, where commercial construction volume has grown significantly over the past decade, owners face these decisions on projects ranging from healthcare facilities to corporate campuses. Understanding the structural difference between these roles helps owners negotiate better contracts and protect their capital investment.
How It Works
A general contractor is awarded a contract — often a lump sum or a Guaranteed Maximum Price (GMP), which is a contract ceiling that caps the owner’s cost exposure — and assumes financial responsibility for delivering the project. The GC hires and manages subcontractors, procures materials, and is accountable for schedule and quality. The owner’s primary relationship is with the GC, not the individual trade contractors.
A construction manager operates differently depending on the contract structure. Under a Construction Manager as Agent (CMa) model, the CM advises the owner but does not hold subcontracts — the owner contracts directly with each trade. Under a Construction Manager at Risk (CMAR) model, the CM assumes financial risk similar to a GC, often through a GMP, while also providing preconstruction services such as cost estimating, scheduling, and constructability reviews. CMAR is increasingly common on complex institutional and healthcare projects where early collaboration between design and construction teams reduces costly late-stage changes.
The practical difference often comes down to when the construction firm enters the project. A GC typically joins after design is complete and bids a set of drawings. A CM, particularly in the CMAR model, engages during design, allowing real-time input on budget and buildability. As shown in the company’s project portfolio at https://consecogroup.com/projects/, complex commercial projects frequently benefit from early CM involvement to align scope with budget before construction documents are finalized.
What the Data Says
According to the Construction Management Association of America (CMAA), the CMAR delivery method is associated with lower cost growth and fewer schedule delays compared to traditional design-bid-build on projects over $10 million. The Design-Build Institute of America has also reported that integrated delivery methods — including CMAR — deliver projects 6% faster and with 5% lower cost growth than traditional GC models on comparable project types.
Fee structures differ between the two models. A GC typically earns a margin embedded in a lump sum or GMP, often ranging from 5% to 15% depending on project complexity and risk. A CM-as-agent fee is typically a direct percentage of construction cost, commonly between 3% and 8%, since the CM does not carry the same risk. In CMAR arrangements, the fee structure blends both elements, with a separate preconstruction fee and a construction-phase fee applied to the GMP.
Key Considerations
Project size, complexity, and owner capacity are the primary factors in selecting a delivery method. Owners with in-house project management staff may benefit from a CM-as-agent approach, retaining more direct control over trade contracts. Owners without dedicated construction expertise typically benefit from either a GC or CMAR arrangement, where a single firm manages the full scope of risk and coordination.
Schedule compression is another key variable. When an owner needs to begin construction before design is fully complete — a method called fast-tracking — the CMAR model is better suited because the CM can issue early bid packages for site work or structural steel while architectural drawings are still being finalized. Traditional GC lump-sum contracts require a complete set of drawings before pricing, which delays the start of construction. The full range of services available under each model is outlined in the services overview at https://consecogroup.com/.
Contract language also matters significantly. Owners should confirm whether the GMP in a CMAR agreement includes a contingency, how savings are shared at project closeout, and what the change order process looks like under each model. Owners in Tennessee should work with legal counsel familiar with state-specific construction law, including lien statutes and public project procurement rules that may dictate which delivery method is permissible on government-funded work.
What is a Guaranteed Maximum Price (GMP) in construction?
A Guaranteed Maximum Price (GMP) is a contract structure in which the construction firm agrees to complete the project for a set maximum cost, absorbing any overruns above that ceiling. If the final cost comes in below the GMP, the savings may be returned to the owner, shared between the owner and contractor, or retained by the contractor depending on the contract terms. GMP contracts are common in both CMAR and some GC arrangements on commercial projects.
Is a construction manager the same as a project manager?
No. A construction manager is a firm or individual that oversees the construction process, often managing trade contractors, schedule, and budget on behalf of the owner. A project manager is a role title that can exist within any organization — including the owner’s company, the GC’s staff, or the CM firm. The terms are sometimes used interchangeably in practice, but they refer to different scopes of responsibility depending on the contract structure.
When should an owner choose a GC over a CM?
A traditional GC arrangement is typically appropriate for straightforward projects with a well-defined scope, a complete set of construction documents, and an owner who prefers to transfer maximum risk to a single party. When the design is fully complete before construction begins and the owner does not need preconstruction advisory services, a competitive GC bid can produce favorable pricing through market competition among bidders.
What types of projects most commonly use the CMAR model?
The Construction Manager at Risk (CMAR) model is most frequently used on healthcare facilities, higher education buildings, large office developments, and public infrastructure projects. These project types tend to involve complex coordination between design disciplines, phased occupancy requirements, or tight budget constraints that benefit from early CM involvement. Institutional owners such as hospital systems and universities have adopted CMAR as a standard delivery method because it provides cost transparency and collaborative scheduling from the earliest stages of design.
How does the choice of delivery method affect project cost in Tennessee?
The impact on cost depends on project-specific variables, but owners in Tennessee should account for regional subcontractor market conditions, labor availability, and material lead times when evaluating delivery methods. In fast-growing markets like Nashville, early CM engagement can lock in subcontractor pricing before demand-driven cost escalation occurs. Owners considering either model for projects in Middle Tennessee are encouraged to review comparable completed projects, such as those listed on the firm’s contact page at https://consecogroup.com/contact/, to assess real-world outcomes in this regional market.
Conseco Group, a Nashville-based CM/GC founded in 1987, applies these practices across healthcare, office, and industrial projects.