In a project using multiple prime contracts, which outcome is typically gained by the owner?

In a project using multiple prime contracts, which outcome is typically gained by the owner?

• A. Increased coordination requirements
• B. Higher legal risk
• C. the builder's markup on their trade partners' work
• D. Reduced control over subcontractors

Answer: (C)

When you use multiple prime contracts, the owner typically gains visibility into and control over how each trade is priced, including the markup the prime adds for coordination and management of their trade partners. Each prime contractor hires and manages their own subs and charges a price that includes their overhead and profit; with separate contracts for different trades, these markups are explicit in the owner’s overall cost. This setup means the owner effectively benefits from the builder’s markup on their trade partners’ work, because that markup is built into the primes’ bids and contracts rather than hidden inside a single general contractor price. The other outcomes describe downsides of this approach—more coordination required, greater legal exposure, and less direct control over subs—so they aren’t gains for the owner.

When you use multiple prime contracts, the owner typically gains visibility into and control over how each trade is priced, including the markup the prime adds for coordination and management of their trade partners. Each prime contractor hires and manages their own subs and charges a price that includes their overhead and profit; with separate contracts for different trades, these markups are explicit in the owner’s overall cost. This setup means the owner effectively benefits from the builder’s markup on their trade partners’ work, because that markup is built into the primes’ bids and contracts rather than hidden inside a single general contractor price. The other outcomes describe downsides of this approach—more coordination required, greater legal exposure, and less direct control over subs—so they aren’t gains for the owner.