General conditions are the costs of managing and supporting a specific job. They usually include the project manager, superintendent and project engineer time, site trailers, temporary power and water, toilets, fencing, dumpsters, safety equipment, small tools, permits and final cleaning. The term also refers to the contract document (such as AIA A201) that sets general terms; in cost accounting, it means the costs. Many contractors code them under Division 01 General Requirements.
Why it matters
General conditions are mostly time-driven. If the schedule slips three months, the super, trailer and temp utilities run three months longer, and that cost comes straight out of margin unless the delay is compensable. On GMP and cost-plus contracts, owners often scrutinize them closely and may negotiate them as a fixed lump sum or a monthly rate.
Worked example
Illustrative: Riverside Medical Center carries general conditions of $185,000 a month (staff, trailers, temp facilities, cleanup). A 6-week delay costs about $277,500 ($185,000 times 1.5). On a $49.3M contract, that alone would fade projected margin by about 0.56 points, from 11.4% to roughly 10.8%, unless some of it is recovered through a change order.
Common mistakes
- Budgeting general conditions as a percentage of cost instead of building them up from duration.
- Mixing them with company overhead, which makes job margins hard to compare.
- Not tracking time-related costs when filing delay claims.
How os.construction handles it
We’re building general conditions as their own budget lines linked to the schedule, so a slip shows its cost impact in the forecast. Founding contractors are helping define the defaults.