Breaking Down the Biggest Subcontractor Contracts on Commercial Construction Sites: Where the Budget Goes
On a commercial construction job site, the contract values for subcontractors can vary widely depending on the size and scope of the project. Typically, the largest subcontract values go to trades responsible for significant structural and systems work. Here’s an approximate hierarchy of subcontractor contract values:
1. Structural and Shell Contractors (Largest)
- Steel Fabrication and Erection: Structural steel is often one of the highest contract values, especially for large commercial buildings.
- Concrete Work: Includes foundation pouring, concrete slabs, and structural concrete.
- Masonry: Bricklaying and stonework can also command high costs in projects like schools, commercial buildings, and hospitals.
2. Mechanical, Electrical, and Plumbing (MEP)
- Mechanical Contractors: HVAC systems are major components in commercial construction and have substantial contract values.
- Electrical Contractors: Wiring, lighting, and power systems are significant in both cost and complexity.
- Plumbing Contractors: Essential for all commercial buildings, especially those with extensive water systems (e.g., hospitals, hotels).
3. Roofing and Cladding
- Roofing: Costs vary widely depending on materials (metal, asphalt, or custom roofing solutions).
- Exterior Cladding and Façade Systems: Includes curtain walls, glass panels, and other high-end finishes.
4. Interior Finishes
- Drywall and Framing: Interior partitions, ceilings, and framing for commercial interiors.
- Flooring: Can vary depending on the material (e.g., tile, carpet, hardwood).
- Painting and Wall Finishes: While not as expensive as other trades, this can still represent a significant investment for large interiors.
5. Specialty Systems
- Fire Protection Systems: Includes sprinklers, alarms, and other fire safety measures.
- Elevators and Escalators: High value, especially in multi-story buildings.
- IT and AV Systems: Advanced technology systems in office buildings or specialty facilities.
6. Landscaping and Site Work
- Earthwork and Excavation: Includes grading, excavation, and site preparation.
- Landscaping: Can be a large expense for high-end commercial projects.
7. Cleaning (Smallest)
- Final and Rough Cleaning: These contracts are typically the smallest on the site. Cleaning is essential but accounts for a minimal percentage of the overall project budget.
Factors Influencing Contract Values:
- Project Type: Industrial facilities may prioritize MEP and structural costs, while office buildings might emphasize interior finishes.
- Location: Labor and material costs vary by region.
- Design Complexity: Custom designs or high-end finishes increase contract values for specific trades.
Typical Distribution of Costs on a $10M Project:
- Structural (Steel/Concrete): 30%-40%
- MEP Systems: 25%-35%
- Roofing/Cladding: 10%-15%
- Interior Finishes: 10%-15%
- Specialty Systems: 5%-10%
- Landscaping and Site Work: 5%-10%
- Cleaning: 1%-2%
By understanding this distribution, general contractors and project managers can better allocate resources and prioritize subcontractor coordination.
