What Does a General Contractor Do?

The general contractor (also called the main contractor) refers to a company that has signed a contract with the owner to implement the project. It can either contract the entire project or some professional parts of the project. In this way, the owner can choose to use only one main contractor or several independent main contractors.

General contractor

Right!

The general contractor (also called the main contractor) refers to a company that has signed a contract with the owner to implement the project. It can either contract the entire project or some professional parts of the project. In this way, the owner can choose to use only one main contractor or several independent main contractors.

In a single contract system, the owner awards the construction of the entire project to a main contractor. In this case, the contractor can combine a variety of different factors to integrate the construction process of the project and develop in a coordinated manner, and to collectively assume the full responsibility for completing the project as scheduled and delivering it for use as scheduled. The general contractor bears full responsibility on the owner for subcontractors and other third parties who execute construction contracts.

If multiple independent contracts are used instead of being centralized by one main contractor, then there are several independent contractors working on the project at the same time. Each contractor is only responsible for part of the project they accept. Each contractor signs a contract with the owner. The contractors are independent of each other. Each contractor then became the main contractor. At this point, the task of coordinating the work of these contractors lies with the owner, construction engineer, or project manager. Owners can also hire a general contractor to perform comprehensive engineering management work.

Chinese name

General contractor

Definition

Companies that agree with the owner to implement the project

Right

Obtaining progress payments for completed projects, etc.

Responsibility

Cooperate and coordinate oversight and correction of errors

1) The right to obtain the construction progress payment of the completed project within the time limit stipulated in the contract; ^[1]

General contractors generally need to assume a wide range of responsibilities and obligations. During the construction process, the responsibilities assumed by the general contractor are constantly changing. The owner should determine what can be claimed in accordance with the terms of the contract, legal regulations and the responsibilities of the contractor during the project. In general, the general contractor's responsibilities clearly specified in the contract include the following: ^[2]

Generally speaking, the claim is the actual loss caused by the parties to the contract in accordance with the contract and the legal provisions during the implementation of the contract. The claimant made a request for compensation. ^[3]

1. Claim principle

The claim should follow the following principles:

(1) the principle of fairness

According to contract jurisprudence and contract relief theory, both parties to a contract have equal legal status in large-scale engineering projects. Making a claim or defending is a legitimate right conferred on the parties by law and cannot be taken away. The principle of fairness of the claim also determines that the claimant's reasonable claim should be compensatory, and the responsible party is only responsible for the damage to the other party within its own responsibility.

(2) Standard principles of contract and consensus of claim

When making a claim, the basic starting point of the claim is the contract or the agreement of the contract. From a legal perspective, people sign a contract for a project because the law promulgated by the state cannot specifically apply the project, and the "law" that is only applicable to the project based on national law is an extension of the law. Therefore, the contract has legal status, and both parties must strictly abide by it. The necessary condition for a claim to occur is that the execution of the contract is contrary to the provisions of the contract. The criterion for judging whether the execution of the contract is contrary to the provisions of the contract should be the terms of the contract. The contract terms need to be analyzed and deduced to obtain some kind of agreement between the two parties when entering into a contract, so as to confirm a certain kind of contract idea implicit in the contract. If there is no agreement, it is necessary to conduct new negotiations on the incident and conclude a new contract (or supplementary clause) to allocate risk to the incident (or this type of incident).

(3) Facts and cause of claim

Identifying the occurrence of claims and determining the amount of claims is based on facts. Mastering the actual situation of the project plays an important role in the claim work. The collection and analysis of the evidence of the claim event plays a very important role in determining the claim event and determining the claim amount. Engineering information is the carrier of the actual situation of the project. During the process of the project, all parties to the contract must attach importance to the collection, processing and preservation of the engineering information. This is an important prerequisite for making a good claim and plays a decisive role in the claim.

2. Claims and contract management

The claim is closely related to the contract. From the perspective of risk management, the contract divides the project risk. As a result, the owner transfers part of the project risk to the contractor, and the contractor obtains a certain amount because of the risk of the project. Pay. During the implementation of the project, the project risk transfer was realized, but often it could not be achieved as required by the contract. Therefore, the risk that should have been assumed by one party's contract parties was transferred to the other party, which led to the occurrence of a claim.

Contract management is the basis for making claims, because the rights and obligations of the parties to a contract must be reflected in the execution of the contract. Without good contract management, it is impossible to know what the party has undertaken and how much it has paid, and the claim cannot be discussed.

Contract management is the basis for a successful claim. In the event of a claim, the reason provided by any party must be supported by evidence, and the evidence must involve the contract provisions and the execution of the contract, because the underlying cause of the claim is a breach of contract. Judgment must be a comparison of contract and fact. The identification of claim opportunities, the determination of claim amounts, and the selection of claim solutions all depend on contract management.

3 Identification of claim opportunities

The analysis and identification of claims opportunities is also of great significance to the claims themselves.

(1) The discovery and identification of claims opportunities is the primary content and task of claims management. Without the discovery and identification of claim opportunities, claims management loses its premise and basis for existence.

(2) The discovery and identification of claim opportunities is the prerequisite and basis for carrying out claim work and monitoring contract implementation. Without the discovery and identification of claims, it is impossible to carry out effective supervision and management of the implementation of engineering project contracts.

(3) Claim analysis and claim processing methods are based on the timely discovery and identification of claims opportunities. Only when a claim opportunity is identified and the cause, consequences, and contractual basis of the claim opportunity are identified, can a claim strategy and method be studied and determined to achieve the purpose of claiming.

(4) The timely detection and identification of claim opportunities can make the general contractor take an active position in contract disputes, which is conducive to the general contractor to propose and adopt effective control strategies and claim countermeasures.

(5) Due to the complexity of general contracting engineering projects, the uncertainty and unpredictability of project implementation, the discovery and identification of claim opportunities generally inevitably have a certain lag effect. Only by carefully studying and deeply analyzing the existence mechanism and identification method of claim opportunities can we effectively reduce the impact of this time-lag effect.

In identifying the claim opportunities, we should start from the following aspects:

1) In-depth study of the contract text, research and explore the rights and obligations of both parties to the contract from different levels of contract terms, contractual agreement, public order and good customs, laws and morals, and clarify the standard of claims.

2) Understand the status of contract execution in a comprehensive and detailed manner, grasp the information of contract execution, and compare the performance of the contract with the requirements of the contract. In many cases, a more in-depth study of contract terms will help us understand engineering information. At the same time, with the continuous increase of contract information, it will also help us to a deeper understanding of contract terms.

3) Organize relevant contract managers to analyze, research and compare relevant information to find possible claims.

4) Further supplement the information and evidence. Generally, it is necessary to obtain more information through negotiations with the other party, and finally determine the event for claiming and identify the opportunity for claiming.

5) Pay attention to timeliness and systematization in claim identification. Timeliness requires timely and accurate grasp and recording of the true situation of the claim event, and if necessary, the other party is required to verify it; systematically, it is necessary to identify the opportunity for claims from the implementation of the entire contract, the expansion of the time scale and the release of the horizon There will be unexpected gains.

The claim is compensation for the loss caused by the other party, not a punishment. Therefore, the reason and evidence of the claim must be recognized by the other party. Therefore, it is very important to understand the other party's thoughts and opinions.

4. Quantitative method of claims

In the claim work, the determination of the claim amount is a difficult and important task, and sometimes even affects the success or failure of the claim.

(1) Quantitative claim principle

Compensation principle: According to the definition of claim, claims are compensation for losses suffered as a result of non-owner's liability, not punishment. Therefore, the principle of compensation should be adhered to when quantifying claims. The principle of compensation has the meaning of restitution.

Fact and evidence principle: When determining your own loss, you must prove your loss based on facts and evidence. This is the fact and evidence principle in the quantification of claims. The evidence must be acknowledged by both parties.

(2) Important factors affecting the quantification of claims

In terms of claim quantification, we mainly determine the amount of claims based on the following factors.

First, the direct impact of breach of contract; the direct impact of breach of contract refers to the direct losses and risks brought to us by the other party's breach of contract, which should of course be compensated. Secondly, the indirect impact of breach of contract refers to the potential risks brought to us by the other party's breach of contract. For example, the impact of the other party s breach of contract on our other work or contract may lead to a third party s claim against us.

(3) Determination of specific claims

With regard to the determination of the specific claim amount, the principle of maximizing the comprehensive income of the party under the controllable risks should be adhered to. In this process, risk management can be carried out to increase its value. For example, during the implementation of a construction contract, if we find that some of our risks are relatively large, we can try our best to associate a breach of the other party with this risk in the process of claim management, so that the other party Take this risk.

5. Settlement of claims

In claims management, the determination of a claim solution is also a very important link. Proposing a good claim solution will reduce the cost of claim incident processing and speed up the settlement of contract disputes.

(1) Classify different claim events, and first resolve the claim events with clear facts and evidence that have an impact on the resolution of other claim events.

(2) Combined solutions for multiple claims. This solution is to combine multiple claims into one case and come up with a total solution. Sometimes these claims are internally linked and can be mutually corroborated in the collection of evidence. One of the claims may be relatively important; sometimes, there are claims that are not internally linked and are only handled together when the solution is designed.

(3) Package solutions. In general, the evidence for most claims is vague, and it is difficult to distinguish the proportion of the responsibilities of the two parties. At this time, a more flexible approach must be adopted-put it on hold until a suitable time comes. .

The requested price of the claim should be as small as possible on the premise of meeting the requirements of the party and compensating the party's losses, so that an agreement can be reached as soon as possible.