In the construction industry, there are various phrases and terms that may be unfamiliar to those who are new to the business. One such term is “self perform”. But what does self perform mean in construction?
Table of Contents
In essence, self perform means that a construction company is performing work with its own labor force. Although it may seem like an obvious concept, there are some important things to keep in mind to make the most of this strategy. Let’s take a closer look.
What does self perform mean in construction?
Self perform is a strategy where the contractor or construction company completes jobs with its own in-house team. On most general contracting projects that scope is concrete, sitework and excavation, carpentry and framing, demolition, or drywall — the trades a GC can staff and supervise directly. Electrical, mechanical, and plumbing are usually subcontracted to specialty firms, though some general contractors do keep an in-house group of journeyman electricians or mechanical crews.
Self-performing greatly reduces coordination issues between different trades and can lead to increased quality control and improved project schedules.
What is a self-performing contractor?
A self-performing contractor is a general contractor that keeps field crews on its own payroll and executes part of a project’s scope with them instead of subcontracting all of it. The label describes an operating model, not a size of company: a firm can self perform concrete and sitework on every job it takes and still subcontract mechanical, electrical, and plumbing to specialty contractors.
That is the practical line between a self-performing general contractor and a specialty contractor. The specialty contractor sells one trade and staffs it. The self-performing GC holds the prime contract, manages the whole project, and carries crews for the portion it has decided to keep in house — which means it is planning two workforces at once, not one.
That second workforce is where the planning gets hard. Project managers, superintendents, and estimators are planned by name and by pursuit; field crews are planned by capacity and by week. Keeping both in one view is what Bridgit does for self-performing general contractors.
What are the benefits of self performing work on a construction project?
Self performing work on a construction project gives the contractor direct control over the cost, the schedule, and the quality of the scope it keeps in house instead of subcontracting. The benefits show up in three places:
- Cost comes down, because the subcontractor’s markup and the risk premium priced into subbed scope stay with the contractor rather than being paid out.
- Schedule control improves, because crews are drawn from the contractor’s own workforce plan — a start date moves when the plan moves, not when a third party can free up a crew.
- Quality and reputation benefit, because the organization that promised the work is the one accountable for executing it, which owners read as lower delivery risk.
How far a contractor takes each of those depends on which scopes it can realistically staff, which is where the pros and cons of self performing are worth weighing scope by scope rather than project by project.
Cost savings
Self performing removes the subcontractor’s markup and the risk premium priced into subbed scope, so the contractor pays the direct cost of its own labor, equipment, and materials instead. What that margin is worth depends on how much of the scope is self performed and how well the crews are utilized — it can be held, reinvested in the workforce, or given back in the bid to make a number more competitive.
Use your workforce data to create a competitive advantage
Download our white paper to see how effective workforce planning can help stay ahead of labor demands and create a strategic project pipeline.
Speeds up construction projects
Self performing work also helps speed up construction projects since the contractor is in complete control and has direct access to materials, equipment, labor, and any other resources needed for the job.
This effectively accelerates project completion time, as contractors are able to access the necessary resources in-house and are not reliant on the responses of any third-party companies.
Improves company reputation
Self performing improves customer satisfaction and trust, since they often view self-performing contractors as more reliable, as they’re doing the work themselves rather than being dependent on an outside third party.
This can have a positive effect on the company’s overall reputation, building confidence in their ability to complete projects quickly and efficiently.
Overall, self performing is a great strategy for any construction company looking to lower costs, speed up project completion time, and increase customer trust. With the right planning and execution, it can have a huge impact on the success of any project.
How does self perform differ from traditional construction methods?
Self perform and traditional delivery differ in one thing: who holds the labor. Under the traditional model the general contractor manages the project and subcontracts nearly all of the physical work to specialty firms. When the contractor self performs, it puts its own crews on part of that scope and carries the labor, the equipment, and the risk for it directly. Everything else that differs — scheduling, coordination, liability, cost structure — follows from that one decision.
| What differs | Self perform | Traditional (subcontracted) |
|---|---|---|
| Who holds the labor | Crews are on the general contractor’s own payroll. | Crews belong to specialty subcontractors working under contract. |
| Who controls the schedule for that scope | The contractor, through its own workforce plan. | The subcontractor, within the dates its contract commits to. |
| Who carries the risk | The contractor carries execution, quality, and safety risk on that scope directly. | Risk on that scope sits with the subcontractor, backed by contract and insurance. |
| How coordination works | Fewer handoffs — the work is sequenced inside one organization. | Every sequence change is negotiated across a contract boundary. |
| How cost is set | Direct cost of labor, equipment, and materials, with no subcontractor markup. | The subcontractor’s price, including markup and a risk premium on the scope. |
In-house resource use
One of the main differences is that self performing requires contractors to use their own resources (such as personnel, materials, and equipment) instead of relying on outside subcontractors. This allows the contractor to maintain more control over the project and prevents any delays caused by outside sources.
More hands-on involvement in the project as a whole
Another important difference is self performing often requires a more hands-on approach. This means that contractors must stay on top of the project and be more involved in all aspects of the work, from planning to implementation.
Challenges and risks of self performing construction work
The risks of self performing come from taking work in house that you then have to staff, supervise, and stand behind. Three show up most often: leaning too hard on crews that are not equipped for the scope or are already committed to another job, carrying the legal and liability exposure that would otherwise sit with a subcontractor, and absorbing the management time that comes with running a scope start to finish. Each is worth testing against the actual workforce plan before a scope is committed to self perform rather than after.
Too much in-house reliance
One of the biggest risks can come from relying too heavily on in-house personnel and resources. If teams are not properly equipped or trained to handle tasks at hand, or if they end up being overstretched, it can lead to significant cost overruns and delays in project completion.
Legal risks
Additionally, self performing may expose contractors to legal risks since they’ll be responsible for all of their own work. This means that if any problems arise during a project, the contractor will have to face the consequences and any associated costs.
Time-consuming
Finally, self performing is a time-consuming process, as contractors will be responsible for managing the project from start to finish. This can lead to burnout or fatigue on the part of the contractor and can result in poor quality work.
Overall, self performing comes with risks that must be taken into account before embarking on a project. It’s important to carefully weigh the risks and benefits of self performing before making any decisions.
Tips for successful self perform construction projects
When it comes to successfully completing self performed construction projects, planning ahead is key. Here are some tips to help ensure projects run smoothly:
- Establish clear project goals and objectives early on to ensure that everyone involved is aware of what needs to be accomplished
- Have a plan for how the work will be divided among your staff
- Ensure that all in-house personnel are well-trained and adequately equipped to handle the tasks assigned to them
- Monitor progress throughout the project and address any potential issues as soon as they arise
- Utilize methods such as project management software to stay organized and on track
By taking the time to properly plan ahead and stay organized, contractors can minimize the risks associated with self performing while maximizing the potential benefits. With proper preparation, self performing construction projects can be done so smoothly and efficiently.
Plan self-perform crews and project staff with Bridgit
Self performing work on construction projects can provide many benefits when conducted correctly. We hope this article has answered the question “What does self perform mean in construction?”.
Need help overseeing labor? Bridgit puts field crews and salaried project staff in one workforce plan, so the staffing behind a self-perform decision is visible before the scope is committed rather than after the schedule slips. Request a demo with Bridgit today!
Think your workforce planning meetings could be more productive?
Download our ebook to learn how to run efficient, effective workforce planning meetings with your team.
