8 Types of Construction Companies

The construction companies are divided into different types depending upon the type of job the companies perform. The role in the construction such as acquisition of land, design, financial planning, execution, operating, maintaining and paper works  denotes the construction company type.

Table of Contents

• Types of Construction Companies
  • 1. Small Renovation Contractors
  • 2. General Contractors
  • 3. Owner-Builder
  • 4. Real Estate Developer
  • 5. Professional Construction Manager
  • 6. Program Manager
  • 7. Package Builders
  • 8. Sponsor-Builder

Types of Construction Companies

Depending upon the job they perform, construction companies are classified into following types,

1. Small Renovation Contractors

Small renovation contractors generally work on jobs requiring small amounts of capital and the type of work that does not require much estimating or a large construction organisation.

They usually perform home alterations or small commercial and office work. Many small renovation contractors have their offices in their homes and perform the ‘‘paper work’’ at night.

2. General Contractors

These companies often are experts in either new buildings or alteration work. Many building contractors subcontract a major portion of their work, while alteration contractors generally perform many of the trades with their own forces. Some general contractors specialise in public works.

3. Owner-Builder

The company that acts as an owner-builder is not a contractor in the strict sense of the word. Such a company builds buildings only for its own ownership, either to sell on completion, or to rent and operate.

Many owner-builders, on occasion, act in the capacity of general contractor or as construction manager as a sideline to their main business of building for their own account.

4. Real Estate Developer

This is a type of owner-builder who, in addition to building for personal ownership, may also build to sell before or after completion of the project. One- and two-family home builders are included in this category.

5. Professional Construction Manager

A professional construction manager may be defined as a company, an individual, or a group of individuals who perform the functions required in building a project as the agent of an owner, but do so as if the job was being performed with the owner’s own employees.

The construction management organisation usually supplies all the personnel required. Such personnel include construction superintendents, expediters, project managers, and accounting personnel.

The manager sublets the various portions of the construction work in the name of the owner and does all the necessary office administration, field supervision, requisitioning, paying of subcontractors, payroll reports, and other work on the owner’s behalf, for a fee.

6. Program Manager

A general contractor or construction manager may expand services by undertaking program management. Such services will include, demolition of existing buildings on the site, devising and providing financial analyses of new buildings. The acquisition of a new site, hiring an architect and other design professionals on behalf of the owner.

Supervising their services, performing pre construction services during the planning stage, advertising for and receiving bids from contractors for the new work, consulting on financing and methods of payment for the work, supervising the contractor, obtaining tenants, whether commercial, residential, or industrial for the completed project, helping to administer and manage the complete project.

Obviously, the comprehensive services outlined above will require that the general contractor or construction manager augment his staff with trained architects, accountants, real estate professionals, and management and leasing experts.

7. Package Builders

Such companies take on a contract for both design and construction of a building. Often these services, in addition, include acquisition of land and financing of the project.

Firms that engage in package building usually are able to show prospective clients prototypes of similar buildings completed by them for previous owners.

Package builders often employ their own staff of architects and engineers, as well as construction personnel. Some package builders subcontract the design portion to independent architects or engineers.

It is important to note that, when a package builder undertakes design as part of the order for a design-construction contract, the builder must possess the necessary professional license for engineering or architecture, which is required in most states for those performing that function.

8. Sponsor-Builder

In the field of government-aided or subsidised building, particularly in the field of housing, a sponsor-builder may be given the responsibility for planning design, construction, rental, management, and maintenance.

A sponsor guides a project through the government processing and design stages. The sponsor employs attorneys to deal with the various government agencies, financial institutions, and real estate consultants, to provide the know-how in land acquisition and appraisal.

On signing the contract for construction of the building, the sponsor assumes the builder’s role and in this sense functions very much as an owner-builder would in building for its own account.