According to North Carolina law, commercial construction projects in the amount of $30,000 or more require a licensed commercial general contractor. Project cost total determines the license level requirement, however, a project that will be more than $1,000,000 in size requires a commercial general contractor with an unlimited license.

There are three common contracting methods used in construction: Single Prime, Design/Build, and Construction Management. While all three types still require the managing contractor to be a licensed commercial general contractor with the appropriate license limitation, each different contract method is uniquely different. Below is a summary of each method:

• Single Prime: Traditional form of contracting where the owner hires an architectural firm to design the project. The owner will also separately hire a general contractor to perform the work according to the specifications as designed by the architect and is responsible for the costs of all materials and labor to complete the project.
• Design/Build: The owner contracts with an appropriately licensed general contractor to complete the process from project design to project completion. The company awarded the design/build contract puts together the team of construction professionals, which includes designers, architects, engineers, and subcontractors, taking the project from design, with the customer, through completed construction.
• Construction Management: The owner contracts with a licensed general contractor to coordinate and manage the project. The construction manager receives a fee to manage, coordinate, and supervise the construction process from the conceptual development stage through final construction completion.

Generally, Single Prime and Design/Build are “Lump-Sum” or “Cost-Plus” contracts. Lump-Sum contracts have the contractor submitting and single bid for a predetermined, specified price in which the contractor assumes liability of most unforeseen costs but also keeps any cost savings within the project. Cost-Plus contracts have the contractor reimbursed for the actual cost of labor and materials and is additionally paid a markup fee for overhead and profit.

Contact us today to discuss your project needs and which contract type would best suit your needs!