A prime contractor, also known as a general contractor, is responsible for overseeing the entire construction process and may hire subcontractors to perform specific tasks. The main contractor is legally liable for the work of subcontractors and must complete the project according to the contract with the owner.
A prime contractor is the company that has primary responsibility for the overall completion of a construction or renovation project. This company may also be known as a general contractor and is hired by the project owner to oversee the entire construction process. A prime contractor may hire multiple subcontractors to perform work on the project, but these subcontractors will not be directly involved in a contract with the project owner.
Most construction contracts are issued after a bidding phase, in which the lowest qualified bidder is awarded the project. The owner will issue a single contract to a construction company, which will become the main contractor on the job. After signing the contract, the company is responsible for all tasks necessary to complete the project. The owner is only responsible for the tasks that were excluded from the contract. He can perform this work automatically or hire additional contractors to complete these items.
The prime contractor can use several different methods to complete the project. He can use his own employees to perform the necessary work. He may also hire specialized contractors to perform specific tasks. These companies are known as subcontractors because they are hired by the contractor rather than the owner. In essence, they work for the general contractor, not the owner directly.
In some cases, the main contractor cannot perform any work himself. Instead, he will hire subcontractors to complete the project while he oversees the work. This type of completion method is known as construction management.
Some project owners may include requirements for subcontractors in the master contract. This means that the prime contractor can only hire companies that have been approved by the owner. The main contractor may also need to include a specific language in the subcontracts based on the owner’s requirements. Even in these types of situations, subcontractors are not considered contractually bound to the owner.
The main contractor must complete the work in accordance with its contract with the owner. If he hires subcontractors, he is legally liable for their failures, as the ultimate responsibility for the work rests with him. He must stick to the project schedule, keep within the budget, and deliver the work to the owner as promised. He must carefully balance the owner’s interests with his own company’s needs when it comes to budget, profit, and getting the job done as per the contract.
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