Page 190 - 2

T RUMP B UILDING P ROJECTS

BE YOUR OWN GENERAL CONTRACTOR
WHEN POSSIBLE

In a typical situation, a GC is hired to oversee all of the work. He will
build the structure and he will contract with all the necessary trades
to complete the construction at a total price. If you are inexperienced
in the many facets of construction, hiring a GC is the way to go even
though it may cost more. Donald Trump, on occasion, hires a GC, but
usually hires a construction manager (CM). The basic difference be-
tween a GC and a CM is in the responsibility for picking and hiring
subcontractors and negotiating their contracts. If a GC gives you a
total price, he will hire all of the subcontractors to do each aspect of
the work. The GC builds his profit into the total price. A CM usually
gets a fee that is a percentage based on the total cost of construction.
The CM acts as the owner’s representative and he’s responsible for
getting the architect and engineers to do the plans and specifications
and gets bids from contractors for the various trades. When bids are
received, they are submitted to the owner who then decides which
contractors to use and what amount will be paid for the work. By
using a CM instead of a GC, Trump controls the bidding and also
controls who will be the contractor for each trade. He can choose the
ones he likes. If he uses a GC, the GC goes out and gets the bids. The
GC gets to pick and choose the contractors because he has total re-
sponsibility for the construction. He hires the subcontractors and
pays them from the monies received from Trump.
Every GC will always build in a profit margin and a reserve for
contingencies on the possibility that the subcontractors won’t come
in at the prices he has in mind or some unseen problem will occur
during the course of construction. The quandry is, you will never
know if the reserve (the contingency) is too much or too little until
the job is completed. If the reserve was too high, you overpaid. If it

169