Construction Contracts: What Are General Conditions?
General conditions are the costs incurred during a project that generally don’t involve swinging a hammer or installing something permanently in your home. Some contractors list some or all of the general conditions costs as line items, Cobalt will list general conditions costs as a single line item based on the total construction cost. Project general conditions costs typically range between six and ten percent on residential construction jobs.
When a general contractor estimates the cost of a project, the goal is to capture all the costs of building — from preconstruction pricing to the cleaning service that washes the windows at the end. Most will charge directly for all costs directly attributable to the project, and then charge a markup to cover the overhead costs that are a result of general business operations not related to a specific project.
Typical General Condition Items
- Site Management
- Material Handling
- Project Management
General conditions can account for 10 percent or more of the project cost, depending on the logistics, access and complexity of the project, so they are a significant factor in a project’s budget. Understanding how much of the budget goes to general conditions and which items are covered will give homeowners a good indication of how the project will generally be run in terms of security, cleanliness and oversight.
