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Contracts & Legal

Contractor

In Plain English

The licensed company that signs the contract with the owner to build the project.

Definition

A contractor is the party who enters into a contract with the owner to perform construction work. The term typically refers to the general contractor or prime contractor who is responsible for the overall project delivery. Contractors are licensed professionals who manage labor, subcontractors, materials, and equipment to complete the work.

Why It Matters in Bidding

The contractor is the party that submits the bid and assumes responsibility for delivering the project at the price quoted, so its qualifications, bonding capacity, and licensing are central to award decisions. In public procurement, owners often prequalify contractors before allowing them to bid, and the prime contractor's markup on subcontractor pricing is a key driver of the final bid total.

Example

The general contractor assembled subcontractor quotes for mechanical, electrical, and concrete work, applied its overhead and profit markup, and submitted the consolidated bid to the owner before the deadline.

Related Terms

General ContractorPrime ContractorSubcontractContract

Frequently Asked Questions

A general or prime contractor holds the direct contract with the owner and is responsible for overall project delivery. Subcontractors contract with the general contractor to perform specialized trades such as electrical, plumbing, or steel. The general contractor coordinates the subs, carries overall schedule risk, and marks up subcontractor pricing within its bid.
Prequalification screens bidders for financial stability, bonding capacity, relevant experience, safety record, and proper licensing before they are allowed to submit prices. This protects the owner from awarding to a firm that cannot complete the work, and it is standard on public and large private projects where the lowest bid alone is not enough.
A contractor's bid typically rolls up direct labor, materials, equipment, subcontractor quotes, general conditions, bonds and insurance, then adds overhead and profit markup. Many also embed a contractor's contingency for field risk. How these components are estimated and marked up determines whether the bid is competitive yet still profitable for the firm.

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