The Significance of Contract Administration in Construction Projects
Businesses that have worked with large-scale projects, particularly construction projects, are aware of the concept of contract administration.
It is the process of creating a contract between an employer and a contractor. The procedure is completed when the contract is agreed upon, and everyone signs the contract.
These documents are intended to defend both parties in the case of any snags or adjustments. There are many stages of contract administration. The first stage is to identify each party’s wants and needs.
This isn’t a simple process, and it takes time and effort. The agreement administrator writes down requirements, expectations, and other demands in a format that is easy to remember and go back to.
The process can be lengthy, especially if the contractor and employer are working together for the first time.
When you are planning the project, you might make various changes to the contract. The meeting and negotiations fall under the contract administration category.
What is the Purpose of Contact Administration?
Contract administration assists in determining if the project is progressing in accordance with the contract relating to site record, valuation, supervision, assessment of payments, and additional payment claims.
An efficient contract administration controls and monitors all the project-related risks and ensures that the project will be completed with quality control under a proper timeframe and stipulated budget.
Furthermore, it also plays a significant role in forming good business relationships because poor contract administration can lead to construction disagreements. Delays in meeting contract criteria might cause the contract to be delayed.
The Steps of Contract Administration
There are various steps involved in contract administration. It starts with the project planning, which leads to tendering stage.
Then there is the construction stage, and lastly, there is the final account stage.
The project completion can end up in two ways; either with project acceptance after completion of the project or it can end up in termination of the project due to poor performance of the parties that were working on the contract.
Contract Administration Beginning Process
The process of contract administration begins with the project design and planning stage. It is crucial to determine the contracting system at this stage to follow a particular project. You must appoint a contract administrator in the planning stage of a developmental project.
1. Design Stage
At this level, contract management responsibilities include cost and time monitoring, as well as management under agreed-upon parameters with the employer.
The employer’s project manager submits a design order at the following stage in the design phase. The regulatory procedures and approvals necessary to build the idea are also part of this stage.
In the design brief, important details related to development are included, such as allocated budget, development period, and land use. After a presentation of the design, the designing team prepares the contract document along with other specifications.
It is also crucial to discuss the risks that can pass to the contractor and those that the employer should take on.
2. Tendering Stage
Tendering stage is a crucial phase of the construction project and it requires more contract administration work.
Create tender documents after selecting the tender procedure. Tender documents are crucial in the contract for most construction projects.
After the tender deadline has passed, the next stage is evaluation. This is yet another crucial responsibility in the building project contract management procedure.
The design team checks and recommends the construction proposals. Clarifying tenderer doubts can be very helpful in avoiding unnecessary claims that can arise during the construction stage
3. Construction Stage
In the construction stage, there is a high risk in terms of money and time. Progress claims and various other legal matters are part of contract administration.
The contract administrator needs to be present at the site during the construction work to ensure efficient management of the work.
Extensive reports along with meetings and formal testing also help to keep an eye on the project.
Different types of settlements and contracts are active in different countries. When you are dealing with contract administration or other related subjects in a challenge, it’s critical to understand the settlement file specifically utilized for the project.
4. Final Account Stage
Monitor defects, warranties, and other liabilities throughout this stage. After completing all the obligations, you will need to prepare a final account certificate.
How Does Project End?
Typically, the contract administration method will improve the project’s reputation. In the end, there can be satisfactory results, or there can be the termination of a settlement owing to poor results. Don’t forget that after delivering a complete project, there may be a legal accountability period for flaws.
Contract administration plays a crucial role in construction projects. It assists in controlling and monitoring the project and can lead to successful project delivery. Titan University offers online Contract Administration in RMS course that can help aspiring individuals to become efficient Quality Control Manager working on USACE construction projects.