When you’re preparing to build in Kelowna or anywhere across the Okanagan, one of the first decisions you’ll face is who manages the construction. Many owners and developers use the terms “construction manager” and “general contractor” interchangeably, but they describe fundamentally different delivery models with distinct implications for your budget, your risk exposure, and your level of control over outcomes. Making the right choice before procurement begins can be the difference between a project that runs smoothly and one that becomes a source of financial and operational stress.
What Is a General Contractor?
A general contractor enters a project under a stipulated price contract, meaning they agree to complete the defined scope of work for a fixed lump sum. Once the contract is signed, the GC assumes responsibility for coordinating all trades, managing the schedule, and delivering the finished building. The GC takes on the financial risk of cost overruns – if subcontractors bid higher than anticipated, the difference comes out of the GC’s margin. This arrangement can feel reassuring for owners who want price certainty upfront, but the trade-off is real: a GC’s profitability depends on keeping costs well below the contract price, which can create pressure around material selections, substitutions, and how scope changes are handled once work is underway.
What Is a Construction Manager?
A construction manager works as an agent of the owner, not as an independent party with a financial stake in minimizing project cost. Instead of a fixed contract price, the CM is paid a management fee – typically a percentage of total construction cost – in exchange for transparent oversight of all trades, contracts, schedules, and budgets. The owner retains direct contractual relationships with subcontractors, meaning all trade costs flow through to the owner at actual cost. This open-book structure gives owners full visibility into where money is being spent and removes the incentive that can lead a GC to substitute materials or resist legitimate design changes to protect its margin. For a closer look at what this role involves day to day, the post on what a construction manager does covers the full scope of responsibilities.
How the Contract Structure Differs
The contractual structure is where the two models diverge most sharply. Under a GC arrangement, the owner signs one master contract with the GC, who in turn enters separate subcontracts with every trade. The owner has no visibility into those subcontracts – what the GC agreed to pay, what scope was committed to, or what trade-offs were made during bidding. Under a CM arrangement, the owner is a direct party to each trade contract, with the CM administering and coordinating them on the owner’s behalf. This means complete transparency on subcontractor pricing, scope, and performance, and it preserves the owner’s ability to make informed decisions about changes without entering into negotiations with a party that has a competing financial interest.
When to Choose Construction Management Over a General Contractor
Construction management tends to be the stronger model for larger and more complex projects – particularly those where design is still being refined during procurement, where the build will be phased, or where the owner wants direct input into subcontractor selection. Multi-family developments, commercial buildings, institutional facilities, and mixed-use projects all benefit from the CM model because scope changes are frequent and owner involvement is high throughout the project lifecycle. If you are planning a multi-family or commercial project in Kelowna or elsewhere in the Okanagan, the development management services that Team Construction provides are structured specifically to give owners that level of oversight and control from feasibility through to final handover.
Cost Considerations: Fees vs. Lump-Sum Contracts
A common concern with the CM model is that the open-book structure exposes the owner to unlimited cost risk, while a GC lump sum provides a fixed ceiling. In practice, on complex projects, the opposite is often closer to the truth. A GC pricing a stipulated price contract must embed contingency for every unknown, and those contingencies inflate the final number. A CM working transparently against actual trade costs tends to bring the project in closer to real market rates. Thorough budget development and cost planning in the early stages – which is a core component of pre-construction services – allows the CM to establish a credible budget before commitments are made, substantially reducing the financial surprises that often arrive with GC change orders late in the build.
How Team Construction Approaches the CM vs. GC Decision
At Team Construction Management, we have spent over 45 years delivering commercial and multi-family projects across Kelowna and the Okanagan under a documented TEAM Process that keeps owners informed and in control at every stage. If you are evaluating your delivery options and want to understand which model fits your project best, contact our team and we will walk you through the trade-offs based on your scope, timeline, and budget objectives.
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