General Contractor vs. Construction Manager: Which Do You Need?

If you're planning a commercial build in Los Angeles, you've probably run into two terms that get used interchangeably: general contractor and construction manager. They're not the same thing. Picking the wrong one can cost you time, money, and a lot of stress.

Here's the plain-English breakdown so you can decide what your project actually needs.

What a General Contractor Actually Does

A general contractor (GC) is the company you hire to build the project. They sign a contract for the work, hold the prime construction agreement, and take on the risk of delivering the job for an agreed price. They hire and manage the subcontractors, schedule the trades, run the site, pull the permits, and hand you the keys at the end.

Most GCs work on a lump-sum or guaranteed-maximum-price (GMP) basis. You agree on a number, and it's their job to hit it. If a subcontractor falls behind or a material price changes, that's their problem to solve, not yours.

You typically hire a general contractor when:

Your design is largely complete and you're ready to build.

You want one company accountable for cost, schedule, and quality.

You prefer a fixed price so you can plan around it.

You don't want to be in the weeds managing trades yourself.

What a Construction Manager Actually Does

A construction manager (CM) works on your side of the table. Instead of holding the construction contract themselves, they're hired as your advisor and representative. Their job is to protect your interests through preconstruction, bidding, construction, and closeout.

A CM helps you develop the budget early, vet and bid subcontractors, evaluate proposals, manage the schedule, run owner meetings, review pay applications, and catch problems before they become change orders. Because they're not building the job themselves, there's no conflict of interest. Their incentive is aligned with yours: deliver the project on budget and on schedule.

You typically hire a construction manager when:

You're early in the process and want expert input on cost and constructability before design is final.

You want a seat at the table when subs are being selected.

You're managing multiple stakeholders (investors, tenants, partners) and need someone to keep the project organized.

You want full visibility into where every dollar is going.

The Key Difference: Who Carries the Risk

This is the part most owners miss. A general contractor takes on the risk of building the project. They sign for the work, and they're on the hook if things go sideways. A construction manager carries no construction risk. They're an advisor. If a sub blows the schedule, the CM's job is to help you fix it, not to absorb the cost.

That distinction changes everything: how the contract is written, how pricing works, who owns the subcontractor relationships, and what you pay for. A GC's fee is built into the construction price. A CM is paid a separate fee for their services, usually a percentage of project cost or a fixed amount.

Which One Is Right for Your Project?

A quick gut check:

If your drawings are 90 percent done, you have a clear scope, and you want a number you can take to your lender, hire a general contractor.

If you're still working through design, want competitive pricing on every trade, or need an advocate to keep an eye on a builder you've already chosen, hire a construction manager.

It's also worth knowing that the same firm can serve in either role on different projects. At LaFaye Contracting, we do both. Some clients bring us in as the GC to deliver a tenant improvement or ground-up build. Others bring us in as the CM to represent their interests on a project we're not building ourselves. The right answer depends on your project, your timeline, and how much risk you want to carry.

Questions to Ask Before You Hire Either One

Whatever role you're hiring for, ask these before you sign:

Have you delivered projects of similar size and type in the last two years?

Who on your team will actually be on my project day to day?

How do you handle change orders and budget overruns?

Can I see your safety record and references from owners (not just subs)?

Are you licensed and insured to operate in Los Angeles?

A good GC or CM will answer all of those without hesitation.

Planning a project? Request a bid from LaFaye Contracting. We deliver commercial general contracting and construction management for retail, tenant improvements, and ground-up builds in the Los Angeles Area.