Chapter 1: Building Trade Contractors
INDUSTRY BACKGROUND
Building trade contractors can be defined as companies that build, fabricate, install or perform related services for others under a contract. In the United States, the construction industry may vie with the food industry as the largest business sector.
Although there are a number of ways of dividing the construction industry, there are three generally recognized classifications:
- General Contractors – who act as primary builders of new construction projects. Their activities can be broken down into three basic methods of operation: (1) building for an owner according to existing plans, (2) contracting with an owner to provide design as well as construction work and (3) acting as a package builder in which the owner is provided with complete turnkey services (i.e., the purchase of land, financing, design, and construction).
You will find that most general contractors will do at least a portion of a job themselves (usually concrete, masonry, or carpentry), although many act as brokers and utilize subcontractors to complete all phases of a project. This second type, often referred to as “paper” contractors, tend to maintain very small staffs to keep their overhead low. Other firms may engage in general construction activities but are not usually considered true general contactors. This includes developers who build for themselves; and project management companies, that supervise projects without assuming responsibility for their completion.
- Heavy Construction Contractors – who limit themselves to specialized construction activities that fall outside the scope of traditional building construction. Some common examples of such contractors might include road building or paving contractors, demolition contractors, utility contractors (gas/water mains, power lines), dam and bridge builders, logging contactors, oil and gas contractors, and asbestos abatement or other environmentally-related operation. Since many of these companies provide highly specialized work, it is not uncommon for them to act as both general contractor and subcontractor, depending on the job.
- Building Trade or Artisan Contractors – who provide a specialized type of new construction work (usually as a subcontractor); or who engage in remodeling, repair or installation services directly with an owner for a specific job involving their specialty trade. Most are locally owned with many being second or third generation family run companies. Of these, over 95% are small to medium size establishments employing fewer than 100 employees. Consequently, this category is the largest type of contracting company operating in the United States today and is the subject of this manual.
