In a construction project, aside from the direct cost of the project itself, a general contractor may also charge fees for costs relating to additional activities and resources used throughout the life cycle of the project.
The costs are called job site overhead costs, or general construction conditions. Construction general conditions are operations and resource expenses which support the labor that goes into construction. Many line items can be considered general construction conditions, but each can be grouped into three primary types.
The first type involves the costs that go into in maintaining the project site while construction is ongoing. This is called site management, and it covers the expenses required to create and maintain the work environment of the project.
The goal of site management is to keep the job site useful, usable and safe for workers and the materials they will use. Site management general conditions may include worker offices/hygiene amenities/planning areas; temporary power and water utilities; construction/traffic/labor permits; and general cleanup, as well as job site and material protection (to prevent theft and damage).
While site management focuses on the job site, the second type of general construction conditions focuses on the care of the actual materials that are installed in the project.
The resulting cost is called material handling: operations involved in the delivery of materials. As construction often requires large amounts of materials, moving them from the delivery vehicle to the job site takes large amounts of time and effort.
The proper placement of materials is also an important factor to consider. Laborers need to spend effort in both planning and undertaking the movement of materials in convenient locations around the job site. The aim of material handling general conditions is to finance all these operations: the manpower involved in the unloading, movement and relocation of materials in a way that allows them to be easily accessed when the construction process needs them.
Finally, the third type of general construction conditions is called project management. These costs cover the professional supervisory labor performed throughout the project. Project management general conditions are intended to support the strategic arm of the construction, compared to the tactical benefits site management and material handling general conditions provide.
Project management may be performed on the job site or in the office, and includes operations at different stages of the construction project cycle.
From planning (pricing projections, mock-up creation) preparation (material samples, tools/material cost research, arranging meetings with property owners, engineers, architects and other involved professionals), procurement (order, delivery and receipt of needed materials) up to the actual construction itself (on-site management, real-time troubleshooting and safety supervision), management and supervision are a critical part of the project process.
Each of the three types of general construction conditions covers the seemingly-insignificant expenses that are involved in a project, all of which time, money and effort. Understanding each of the general conditions involved in the construction process will allow one to see clearly how it will be operated based, make sound decisions and changes depending on the findings, and create a detailed, expense-oriented and financially transparent overview of the entire project.