Most people think payment to a general contractor for a remodeling project is broken down into four main categories: materials, installation labor, subcontractors and markup. But there’s a fifth category that may not immediately come to mind: General Conditions or GC.
General Conditions are the costs incurred during a project that generally don’t involve swinging a hammer or installing something permanently in your home. These costs are usually not visible. Here’s what you need to know.
When a General Contractor estimates the cost of a project, the goal is to capture all the costs of building, from pre-construction pricing to the cleaning and washing the windows at the end.
Outside of “swinging a hammer cost”, Contractors charge for all costs directly attributable to your project, this includes the time involved in making your project “run” efficiently. Working with the design team, site meetings, agendas and minutes, deliveries arriving at the right time, shop drawings accurately reviewed, working out hundreds of pages of sub-contractor invoicing, change orders and the impact they have on orders, timeline and sub-contractor dependencies, returning wrong and damaged deliveries and rescheduling and adjusting timelines and sub-contractors accordingly.
On top of General Conditions we charge Profit and Overhead which is both our markup, to cover the overhead costs that are a result of general business operations and finally our profit. General Conditions are not profit!
WHAT SPECIFICALLY ARE GENERAL CONDITIONS?
GC costs divide roughly into three categories:
- Site Management
- Material Handling
- Project Management
Site Management, includes all of the tasks that have to do with running your job site.
- Dust control
- Temporary electrical and plumbing
- Site maintenance and daily cleanup – Manhattan is different here, in addition to site work we also have to also clean and protect all hallways and common areas daily, this is often a separate charge.
- Site safety
- Building access and coordination
- Neighbor relations
- Building relations and bribes – yes bribes. Your building already loves you, we need to pay for them to love us, it is expected in NYC. Elevator access? Building access? Water shut downs? Sprinkler shut downs? Yep, each one costs us $200 – $500 in the right pocket, otherwise delays, missed appointments and who knows what else….
Material handling is the labor required to deliver and move materials around the job site. Often materials are delivered with a flat fee from a supplier, but when the truck arrives with the materials, the driver does not unload, or unloads in a location far away from where the materials need to be staged. That means staff onsite must spend time moving those materials where they need to go. This is an “all hands” affair, stopping the work and utilizing $80 per hour carpenters and $25 per hour helpers. This can include framing materials, millwork, cabinetry and windows, shower glass, door hardware, doors. There are also one-off material needs that require a trip to a supplier, or can be met less expensively than paying the supplier’s delivery fee. General Conditions pays for the trucks and their parking tickets of around $800 per month per project.
Why Clients don’t understand “Client Provided”
Materials Handling takes a great deal of time in NYC. A typical $2MM project will have $400,000 of finish materials such as tile, flooring, appliances etc., this is outside of “our deliveries” for millwork, cabinetry and field materials such as sheetrock and studs etc., totaling over 100 deliveries in a 9 month period.
Everything is delivered “curbside”. So who is moving your 400lb stove or 7’ tall Subzero, 2 tons of stone, 2000sf of 5” oak floor, 150 light fixtures, 2000lb of glass for 3 bathrooms, 16 x 7’ solid core doors at 220lb each and hardware to the 23rd floor down 3 flights of stairs and across half a city block of basement…. Your GC. This can take literally half a day for 3 men for a single delivery! Assuming it fits in the elevator and we don’t have to carry it up 23 flights of stairs.
If its plumbing parts, or electrical fixtures, there can be 10 different components in a single plumbing fixture, each in its own box and a 7 – 15 digit part number, most of which have very delicate finishes. Each part must be opened, checked for perfection, color match, specification, against the bill of lading and architectural specifications and repackaged. The box must be clearly marked by room and stored for the duration of the project in a dust free environment. Losing or damaging a single component can take several weeks to replace, this can cause serious delays and punch list issues. Buildings change heavy fines for GC’s being late on a project, 50 Central Park South charges $1,000 per day for the first month and $5000 per day by the third month, payable by the GC.
- Scheduling elevators
- Receiving, checking specifications and model numbers, finish, color match, inventorying, storing, moving and protecting deliveries
- Materials on site out of phase will delay the project! Moving inventory and materials around the site for work progression, such as tile, flooring, kitchen appliances etc. and then recovering and protecting takes a great deal of time
- General Contractor is personally financially liable for any damage to any materials and finishes once on site
The third piece of General Conditions costs is project management. Depending on the size of a project, management can happen in a few hours each week or require more than 80 hours a week.
Project management can include preconstruction pricing; establishing scopes of work and meeting with subcontractors; creating mock-ups or ordering materials to show options; holding onsite meetings with the owners, the architectural team and other designers; and meeting inspectors to have work signed off on. It also usually involves creating material take-offs, ordering and scheduling delivery of materials, scheduling and assigning tasks to staff, helping troubleshoot subcontractors’ work and overseeing jobsite safety. Project managers also keep track of change orders, write agendas for meetings and communicate with clients and architects.
- Communication and oversight – air traffic control!
- Blueprint and shop drawing reviews
- Sequencing and timeline
- Budget control
- Quality control
- Code compliance
- DOB sign off’s
- Sub-contractor scheduling, oversight and coordination
- Managing, scheduling and updating project timeline, dependencies and deliveries
- Working with building management and superintendents
- Site safety
- Change orders
There’s also daily and final cleanup. On a large job site, it may take one to two hours daily to make sure the jobsite is tidy and safe inside and out. It’s almost always more efficient to install materials and drop the scraps and packaging than picking them up as you go, so this means daily cleanup is a must. Contractors also usually count on final cleanup costs: A professional cleaning crew is a must after work is complete, your GC will leave the site “broom clean”, everything is wiped down, windows are washed but the space will need a professional cleaning before you move in. for a 2000sq/ft apartment budget $3,000 – $5,000.
If a temporary heating source, scaffolding or other specialty rental equipment is required, you might see those costs covered in General Conditions as well.
Once the finish materials — flooring, tile, cabinets and doors — are installed, they are usually covered with materials like Ram Board, re-enforced construction paper and other protective coverings to prevent damage. Site protection can also include covering materials between the time they are delivered and the time they are installed. Delicate materials and finishes will need to be protected especially carefully and require special adhesive tapes that do not affect polished surfaces, these tapes can be $20 per role and we regularly need 50 – 100 roles on a project!
General Conditions will account for 10% – 20% percent of the project cost, depending on the logistics, access and complexity of the project, so they are a significant factor in a project’s budget.
Understanding how much of the budget goes to General Conditions and which items are covered will give homeowners a good indication of how the project will generally be run in terms of security, cleanliness and oversight.
I hope this helps.
West Village GC LLC