General Conditions (Division 1) are the costs incurred by the General Contractor to manage the project, independent of the actual sticks and bricks. While some GCs simply apply a flat 6% or 8% multiplier to the hard costs, this "lazy estimating" method is extremely dangerous on complex or schedule-driven projects.
The Time-Driven Nature of GCs
Unlike concrete or steel, General Conditions are intimately tied to the project schedule. If a project is delayed by two months due to rain, the concrete yardage doesn't change, but the GC must pay two extra months of superintendent salary, trailer rental, temporary power, and fencing. Therefore, a GC estimate must always start with a critical path schedule.
Core Components of General Conditions
- Project Staffing: Project Managers, Superintendents, Project Engineers, and Safety Officers. These are usually calculated on a "Months" or "Weeks" duration.
- Temporary Facilities: Jobsite trailers, temp toilets, handwash stations, and temporary fencing.
- Temporary Utilities: Temporary power setup (spider boxes), monthly electrical consumption, temp water, and winter heating fuels.
- Hoisting & Logistics: Tower crane rental, operator wages, buck hoists (man lifts), and street closure permits.
- Cleanup & Waste: Daily labor for sweeping, dumpsters, carting fees, and final cleaning.
Missed: Temporary Power Consumption and Winter Heating
A GC might include the cost for the electrician to SET UP the temporary power poles, but totally forget to budget for the actual monthly power bill from the utility company, which can run thousands of dollars a month on a large site.
We mandate that the GC specifies who pays the utility bill during construction. If the contract stipulates the GC pays, we calculate the estimated kilowatt-hours for temporary lighting, tower cranes, and tools, plus the massive fuel costs (propane/diesel) required for ground thawing and winter heating.
General Requirements vs. General Conditions
While often used interchangeably, sophisticated estimators separate them. General Conditions are the overhead costs (staff, trailers, insurance). General Requirements are the tangible site operations (dumpsters, temp power, final cleaning). Separating these makes it easier to track the "burn rate" of the project overhead versus the hard operational costs.
The "General Conditions Burn Rate"
To evaluate risk, we calculate the GC Burn Rate: the cost per day or per week to keep the jobsite open. If a project has a weekly burn rate of $15,000, the GC knows exactly how much a 4-week weather delay will cost ($60,000) and can aggressively pursue change orders or schedule recovery to mitigate that specific financial risk.