Construction Contract Administration 101: All the Basics You Need to Know
Construction projects undergo multiple stages, starting from the initial phase, where the project is conceptualized through design development, construction, and finally, the completion phase.
Contract administration plays a crucial role in each phase of the project. However, with so many contractual conditions and clauses, it can be difficult to ensure everything is how it should be.
Therefore, it is important to understand the basics of construction contract management or partner with reliable professionals with relevant experience in the field.
At ADDMORE Services, we believe in educating all the clients that trust us with their projects. We have curated this guide to help sharpen your knowledge regarding the subject. Keep reading to find out everything you need to know to get a basic idea. For more, feel free to reach out to our experts any time; we would be happy to help.
Construction Contract Administration: The Basics
The primary purpose of the mutually agreed contract between multiple parties is to ensure each stakeholder is well-aware of the obligations and fulfills them the right way.
Construction contract administration refers to the process of managing the design, agreement contract, and construction process of development projects with proper control. It involves monitoring the project performance to ensure it remains under the agreed contractual obligations. Let’s learn more about the role contract administration plays in each construction stage.
Contract Administration in the Design Stage
Most employers look for experienced construction project managers at this stage with only a conceptual plan in their minds. During this phase, contract administration responsibilities include controlling and monitoring both time and cost under the terms pre-determined by all parties involved.
Next, the project manager presents the design brief to move on with the necessary approval and other requirements needed to further develop the preliminary concept. The brief typically includes details regarding the development plan, such as compliance requirements, land use, allocated budget, functional requirements, and suggested development period.
The design team prepares the final design and drawings once the brief is presented. Then, contract documents with specifications are prepared by a professional contract administrator.
If you do not know how to move forward, we can help you connect with a highly-qualified contract administrator who will prepare the contract documents after the contractual matters are discussed and finalized by all involved parties.
During this stage, it is vital to discuss and allocate resources to risk management. Identify which risks will be undertaken by the owner and which ones will be passed on to the contractor.
It is equally important to determine other critical factors related to construction risk management in this phase. These include defects liability period, liquidated damages, construction period, retention sum, payment terms, and so on.
Contract Administration in the Tendering Stage
The procurement stage is crucial for all projects. Contract administration duties pace during this stage. It is necessary to identify the procedure for the tender before ensuring all the required documents are properly prepared. These documents are part of the contract in most construction projects. Therefore, make sure to check all the tender documents meticulously before calling for bids.
When the tender closing date arrives, the tender evaluation process starts. At this point, the contract administrator or quantity surveyor determines the evaluation criteria. It could vary depending on the technical proposal, price, and time.
The design team may also be involved in the tender evaluation process by recommending or checking construction proposals to clarify the tenderer’s issues and doubts and avoid unnecessary variation claims that could arise during the construction phase.
Contract Administration in the Construction Stage
During the construction phase, it is crucial that each party understands and agrees to the obligations mentioned in the contract documents. Risk heightens during this stage in terms of both money and time. Simultaneously, it is also important to ensure the work gets done with the quality mentioned in the specifications.
Contract administration at this stage involves contract variations, progress claims, and other legal matters. The contract administrators are aware of the clauses in the binding contract. It is important to understand which contract document is specifically used for the project you are planning to build as forms and related matters vary in different countries.
Team ADDMORE Services has a network of professionals that have worked with businesses in diverse sectors in the Republic of Ireland, New Zealand, the USA, the UK, Australia, the Middle East, and various other countries worldwide. They are well-versed in compliance laws, best industry practices, and other things that need critical consideration to ensure a seamless and profitable experience for every stakeholder involved in the project.
Contract Administration in the Final Stage
Contract administration during the completion, maintenance, and final account phase includes monitoring the warranties, defects, and other liabilities. Once all obligations are fulfilled, a Final Account Certificate is prepared.
Any adjustments in terms of liquidated damages, variations, or penalties must be indicated in the final account during this stage. The retention money release is also included in this stage.
The construction contract administration process ends once the project is accepted. It could be after project completion with due performance or contract termination because of poor performance by any of the involved parties.
Since contract administration is not a simple process and many risks and disputes are there to be solved, the best way to move forward is to partner with reliable outsourcing companies that can connect you to highly skilled professionals who can help ensure the project gets delivered within the stipulated contractual obligations.
The ADDMORE Services Difference
Curating detailed contracts and administering them efficiently are keys to keeping your firm safe from construction claims in the future. Experts at ADDMORE Services possess extensive experience and knowledge needed to prepare, analyze and administer contracts or handle disputes and claims for AEC projects worldwide.
The consultants carefully analyze the overall performance and contractual obligations of all concerned parties to identify liabilities and assist in timely and successful claim resolutions.
Schedule a consultation with the team to learn more about their contract administration and construction claim-related services. The reputable BPO company also offers a wide variety of comprehensive offshoring and outsourcing services to clients worldwide.
The cost-effective solutions include architectural drafting services, Primavera modeling services, BIM services, 2D and 3D CAD drafting services, Revit design services, takeoff estimating services, real estate rendering, quantity surveying services, construction project management, and more.