The term general contractor (GC) and main contractor, as well as subcontractor, are frequently heard in the construction industry and the concepts are similar and mixed! What is the difference between them? What are the responsibilities and functions of each of them? On what basis are they chosen? This is what we will discuss in the following lines.

In fact, the general contractor is the same as the main or basic contractor, and it is only one job that has many names. It may differ significantly from the subcontractor in several aspects, and it may be similar in limited aspects.

To find out the definition of the GC and the subcontractor, it is necessary to identify first the work structure of contracting projects and its parties, who we will mention later in more than one place, and they are:

The Client: May be an individual, a real estate developer, a real estate investor…etc. He is the owner of the project who owns the idea, the financing tools and the website.

The Consultant Engineer:  Could be a person or an engineering institution, who is chosen and appointed by the owner of the project, and undertakes the task of designing, supervising the GC, holding periodic meetings with him to discuss workflow methods, follow-up on building materials purchases, and the efficiency of the site work crews, as well as verifying The contractor’s commitment to the project’s declared budget, and to work according to the specified schedule.

The GC: Is the person to whom the project bid was awarded and is responsible for its complete management and construction. Appointed by the owner of the project and subject to the supervision of the consultant engineer and  assumes full responsibility before him for the course of work from inception to the delivery stage.

The Subcontractor Who represents the cornerstone of building and construction projects. Works of a craft nature are assigned to him and selection is made according to the mechanism for awarding the tenders offered. He is subject to the supervision of the GC who bears full responsibility for his performance before the client.

The essential differences between a general contractor and a subcontractor:

 First: the job description

The GC

Could be an individual, a company, or a non-governmental entity, with skills, experience, creditworthiness, and a government license to engage in the activity of managing contracts for building, construction, civil engineering, and engineering construction works, for the benefit of himself or to a third party (real estate developer – real estate investor – project owners….etc), and the implementation of the related services involved in the activity. He is appointed by the aforementioned entities under a formal contract for the project’s construction  .

His capabilities vary according to the project assigned to him, in the sense that he may have the skills required to complete a small construction project on his own and depending on his own resources, while in larger and more complex projects he ought to seek the help of third parties to implement parts of the project called subcontractors.

The Subcontractor

Could be an individual, a team, or a company specialized in a specific field of crafts. The subcontractor possesses high skills in specific areas of the construction fields (excavation – demolition – roofing – cladding – plumbing – electricity … etc.), and has extensive experience in the task entrusted to him. Work on a specific part of the project.

Second: Tasks and Responsibilities

The GC

• Concluding contracts with the project owner, suppliers of building materials and subcontractors.
• Bears full responsibility for the implementation of the plan and designs of the project, its management and coordination, monitoring the application of occupational safety and security standards at the construction site, from the stage of assuming the works until the handover of the project.
• Following up the project life cycle, managing and supervising subcontractors, and receiving what has been agreed upon with the client.
• Checking the insurance bonds and guarantees related to covering the costs of work injuries for the subcontractor’s crew, as well as making sure that he has an appropriate credit limit to ensure the quality of the financial coverage that affects the fulfillment of his obligations towards his staff and then the completion of the work assigned to him on time.

The Subcontractor

• Holds a meeting with the GC before starting his duties to discuss the work plan, the distribution of tasks, the site health and safety agreement and risk management, in addition to holding periodic meetings later, to inform him about the work progress and any problems or obstacles that may arise.
• Securing workers from work injuries, training them on occupational safety and security standards, supervising them, and monitoring structures to ensure their workability.
• Preserving the work site safe and free from obstacles and obstructions and providing sanitary facilities for workers (running water – toilets).
• Securing the site, storing materials and equipment and protecting them from damage or theft.
• Keeping records of any potential accidents or risks for reference when needed.

Subcontractors are divided into two categories:

A. Labor suppliers.

B. Suppliers of labor and building materials and they are the most common.

Third: The Contract

It is a legal form of agreement between the contracting parties, specifying the responsibilities, rights and duties of each party, as well as the policy for payment of dues, standards of safety, public health and occupational security, in which reference is made to dispute resolution mechanisms in the event of a breach of one or some of the clauses, and means of redress from potential legal loopholes to avoid the fraud of any of the parties.

In contracting contracts, the rights and duties of the GC are relatively similar to their counterparts related to the Subcontractor and each contract is concluded separately.

The GC contract

•  Its two parties are represented by the client (the owner of the project) and the GC, the second party is responsible for taking all measures and procedures to complete the work assigned to him, the criteria for selecting building materials and their conformity with the specifications, and undertakes to commit to delivering the project complete as agreed upon without any shortcomings or defects, in the date and the time specified, for a fee.
• It also refers to the inevitability of the client’s obligation to pay the contractor’s dues upon completion of project delivery, unless otherwise agreed.
• The general contractor’s obligation to complete the work himself according to his capabilities and sources compatible with the needs of the project, or under his own management in the event that he hires subcontractors, and the client must give him approval to employ third parties, otherwise the process of transferring the work to a third party will be considered a violation of the terms of the contract.

The Subcontractor contract

• Concluded between the GC and the subcontractor, in which the first party entrusts the assignment of part or all of the work to the second party, unless there are impediments preventing the use of a subcontractor by the client, whose approval is a prerequisite and referred to in a separate clause in the GC contract.
• The contract of the subcontractor follows the contract of the GC, and the second is concluded on the basis of the pillars and validity of the terms of the first and it is invalidated by its invalidity, in accordance with the principle “if the origin falls, the branch falls.”
• Although the employment of a subcontractor is not permissible without the aforementioned client’s approval, the second has no direct dealings with the first, and does not imply any obligations towards him, as considered a “third party” in relation to the contract concluded between the GC and the subcontractor.
• The contract specifies the terms and scope of the subcontractor’s work, project tasks and materials required for its completion, provisions for delay penalties, dues and payment dates, which must be consistent with those contained in the GC ‘s contract, otherwise any difference between them will be considered fraud and will lead to financial disputes between the two parties to the contract.
• Ways to handle and resolve disputes peacefully by an arbitrator, or judicially by the courts should be included to ensure the successful completion and delivery of the project.
• The conditions for termination or rescission of the contract should also be included and the cases that prevent it from being completed on the part of either party should also be included.

Regarding the organization of work in contracting contracts of all kinds (general contracts – subcontractors), the Saudi Contractors Authority launched the Electronic Model Contracts Initiative, which are integrated contracts from a legal and technical point of view, including the contractors and the subcontractors registered with the Authority, whose competence is guaranteed, as well as the client (project owner – beneficiary). It aims to raise the level of quality of project implementation and reduce its stumbling upon disputes between the contractor and the customer and to reduce legal disputes in cooperation with the competent authorities.

With regard to subcontractors, it covers all field activities.

To view the contracts, log in to the account on Muqawil platform or Nafath platform.Also view the guide for using model contracts.

Initiatives to organize job opportunities for contractors and subcontractors in accordance with the Kingdom’s regulations

The Saudi Contractors Authority regulates the work of contractors and subcontractors by registering on the Muquawil platform, which provides opportunities to search for construction projects in the government and private sectors as well as individuals, for all contracting establishments of all sizes, specializations and locations. 

Etimad platform also supports viewing and submitting tenders for government projects by visiting the platform and choosing  search for competitions.

As for qualifying contractors to carry out the construction and development of factories, Modon portal of the Saudi Authority for Industrial Cities and Technology Zones has provided building contractors qualification services.