General contracting in industry – what is it and when it makes sense

General contracting in industry – what is it and when it makes sense

General contracting is one of the core investment delivery models used by industrial companies. In recent years, its importance has increased significantly, particularly in projects related to energy efficiency, emission reduction, and the modernization of technical infrastructure in production facilities. This trend is driven both by the growing complexity of such investments and by strong pressure to strictly adhere to project schedules and budgets. The decision to adopt this model should always be preceded by an analysis of the project’s scale, complexity, and risk profile. When properly selected, a general contractor can become not only the executor of the investment, but also a partner supporting the company’s energy transition process.

What is general contracting?

General contracting is an investment delivery model in which a single entity - the general contractor - assumes responsibility for the entire investment process or its core components. In practice, this means that the investor signs one contract, while the general contractor coordinates all design works, procurement, construction, installation, and commissioning activities.

In industrial facilities general contracting most often applies to infrastructure, technological, and energy-related projects carried out in operating production plants, where continuity of processes, safety, and precise coordination across multiple disciplines are critical. Under this model, the investor retains strategic control over the project’s scope and objectives, while operational responsibility lies with the general contractor.

How does general contracting work?

The foundation of general contracting is a contract that clearly defines the scope of responsibility, schedule, budget, and settlement rules. Depending on the project structure, the general contractor may deliver the investment under various formulas, including design-and-build.

In industrial projects, general contracting typically involves the following principles:

  • a single contract covering all or most of the investment scope,
  • coordination of subcontractors and suppliers by the general contractor,
  • responsibility for integration across disciplines (construction, electrical, automation, process engineering),
  • settlements based on lump-sum, cost-based, or hybrid models,
  • clearly defined milestones and acceptance procedures.

In energy efficiency and decarbonization projects, responsibility is increasingly extended to include technical performance parameters, such as achieving defined energy savings (e.g. EPC – Energy Performance Contracting) or emission reduction targets.

Scope of the general contractor’s responsibility

The scope of responsibility of a general contractor is broad and includes both technical and organizational aspects. The role is not limited to executing construction works but covers management of the entire investment process.

The general contractor’s responsibilities typically include:

  • coordination of design works and technical approvals,
  • organization and supervision of construction and installation works,
  • schedule and budget management,
  • selection and supervision of subcontractors,
  • ensuring compliance with regulations, standards, and site-specific requirements,
  • integration of new installations with existing infrastructure,
  • commissioning, testing, and handover of systems for operation.

In projects executed in operating industrial plants without technological shutdowns, a key responsibility is minimizing disruptions to production processes and ensuring safe execution of works in close proximity to active installations.

Transfer of risk to the general contractor

One of the main reasons for choosing the general contracting model is the transfer of part of the investment risk from the investor to the contractor. In industrial environments, where interference with technical infrastructure can directly affect production continuity, this is particularly important.

The general contractor assumes responsibility for coordinating multiple disciplines and entities involved in the project, as well as for identifying and resolving potential design and execution conflicts. The contractor also bears the risk of delays resulting from organizational errors, inadequate work planning, or issues on the side of subcontractors and suppliers.

Another critical area of responsibility is the accurate estimation of installation and integration works and ensuring efficient commissioning of the system after construction is completed. As a result, the investor can limit operational involvement and reduce the risk of escalation during project execution.

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What challenges can general contracting create?

The general contracting model may also involve certain risks, which investors planning energy or decarbonization projects should be aware of. The most common challenges include:

  • reduced flexibility when introducing changes during execution,
  • dependence of quality and pace of work on the competence of a single entity,
  • risk of excessive simplification of technical solutions to optimize costs,
  • limited cost transparency under lump-sum contracts.

However, these risks can be largely mitigated through proper scope definition, precise contractual provisions, and the selection of a general contractor with proven experience in industrial projects.

Does DB Energy act as a general contractor?

DB Energy delivers industrial projects using the general contracting model, assuming responsibility for the entire investment process - from planning and design, through coordination of procurement and installation works, to commissioning and final acceptance. This model is particularly applied in energy efficiency and decarbonization investments, where integration of technological solutions with existing plant infrastructure is critical.

A key element of DB Energy’s approach is the combination of audit and engineering competencies, ensuring consistency between assumed energy performance targets and the actual execution of the investment. As a result, general contracting extends beyond coordination of works to include control over technical parameters, schedules, and expected energy outcomes in operating industrial facilities.

Which investments are best suited for general contracting?

General contracting is particularly effective for projects that are technically and organizationally complex, where integration of multiple systems and precise coordination are required.

In the field of energy efficiency and decarbonization, these include:

  • comprehensive modernization of plant energy systems,
  • cogeneration and trigeneration installations,
  • waste heat recovery projects,
  • advanced automation and energy management systems,
  • modernization of heat and cooling sources,
  • investments executed in operating industrial facilities.

In such cases, the general contractor acts as a technology integrator, reducing the risk of errors at the interfaces between different disciplines.

When is in-house execution a better option?

Not every industrial investment requires the involvement of a general contractor. For simpler projects with a limited scope and lower integration requirements, in-house execution may be a more effective and cost-efficient solution.

This typically applies to single equipment upgrades, straightforward replacements without interference with supervisory systems, low organizational risk projects, or investments delivered by experienced in-house technical teams. Examples include replacement of electric motors with higher-efficiency units, lighting upgrades to LED fixtures (so-called 1:1 replacements, i.e. replacing lamps without modifying the electrical installation), or heat recovery from compressors. In such cases, however, it is essential that the company has sufficient internal resources and technical competencies.

Summary

General contracting in industry is a proven investment delivery model that is particularly well suited to energy efficiency and decarbonization projects. It helps reduce risk, structure the investment process, and ensure technical consistency of implemented solutions.

The choice of general contracting should always be based on a conscious assessment of the planned investment’s nature, scale, and level of technical and organizational risk. For projects requiring coordination across multiple disciplines, execution in operating plants, and integration of new systems with existing infrastructure, this model helps streamline delivery and reduce the burden on the investor.

From the perspective of industrial companies, the general contractor increasingly acts as a technical partner—one that not only executes the investment, but also supports the investor in risk management and decision-making during project execution. Experience in industrial environments, familiarity with operating facilities, and the ability to integrate diverse technologies ultimately determine the real value of such cooperation and the success of the entire project.

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