Contract administration is the backbone of any well-executed construction project; it concerns the management of contract terms, coordination between parties, and compliance with all kinds of obligations throughout the construction process. Good contract administration will avoid miscommunication, delays, and unexpected costs, making life much easier for all involved.
That said, let’s look at how important construction contract administration is, what it really entails, the main stages, and why this structured process plays a crucial role in bringing the construction project to life.
What Is Contract Administration?
Contract administration is the managing and overseeing of a signed contract from commencement to the end. In construction, this would mean ensuring the work carried out is in accordance with approved plans and specifications and meeting the legal requirements, scheduling of payments, and effects of necessary changes in the contract.
While the responsibility for keeping the construction moving along usually falls to the project managers, contract administrators work to keep the specifics of the contract in focus as a means of protecting the interests of both parties. Here’s how crucial construction contract administration is during the stages of a project.
Phases of a Project
A construction project is usually divided into several stages, which take the project right from conception to completion. Each one of these stages finds the presence of contract administration, ensuring clarity and accountability at every step. Let’s have a look in detail at these stages.
Phase One
The first phase is tendering and pre-contract administration. This tendering phase is a very important first step in any construction project, laying down the path to smoothly operate the work and end with quality.
It’s the phase in which the client and the team will jointly shortlist several qualified building companies and invite them to quote for the work. By obtaining several quotations, the client will have the chance to compare prices and services and thus pick the most suitable company to address their needs and comfort within budget.
There are three key activities: preparation of the tender documentation, selection of companies and call for tender, analysis of tenderers and negotiations for inclusions and exclusions and lastly review of the project specifications and building contact. These activities are fundamental to the project, in ensuring that the company selected understands the specifications of the project and is thus prepared to meet them without later misunderstandings.
The aim of this phase is to select the most competent and suitable company for the project, ensure quality results and minimise the chance of any variations during the construction process.
Phase Two
In the second and final phase, the documentation and the construction certificate have been completed and provided, the building company has been selected and even the process of construction has started. This stage ranges from liaison with the selected building company, engineers, and consultants to regular site inspections to monitor progress.
Hiring a firm that assists in every matter of construction administration, right from the management of progress payments to assisting clients in selecting materials, fixtures, fittings, and colours is crucial. In the end, the firm should also do post-construction assistance and review the project for any defects, leaving you with a flawless construction.
Why Is It Important?
Construction contract administration is critical and controls risks that will, one way or another, affect the outcome of attaining goals within a specified time and budget. If not administered well, projects will be delayed or go over budget, or even their quality will not be as expected. Well-managed contracts reduce these risks because they stipulate a clear obligation in front of both parties, their timelines, and absolutely clear procedures for resolving issues.
This structured approach to managing projects saves time and money and builds good working relationships between contractors, clients, and other parties involved in the project. Effective contract administration also extends legal protection. Construction projects are usually very costly, involving complicated activities; deviation from anything agreed upon in a contract can lead to disputes.
By monitoring all the details of the project, a contract administrator can provide clear documentation that will protect all parties in case of disagreements. This function acts as an intermediary, enabling clients and contractors to stay informed and maintain responsibility when seeking solutions for unexpected events.
When Does it End?
The contract administration process does not just end because the last nail is hammered in. The last phase of a construction project, or post-construction, is equally as important as the others. The contract administrator ensures that all inspections are done, that all final adjustments or repairs are completed, and that in fact, the project meets all of the requirements of the contract. Only when all parties are satisfied and the project’s deliverables are met does the formal contract administration end.
Contract administration holds the beginning and conclusion of a construction project together, keeping everything on time and within budget through organisation and transparency of every single stage. With proactive management, active communication, and hard work in documentation, contract administration shields the interests of all parties concerned and contributes toward the successful completion of each project in their name. Understanding the importance of contract administration can mean the difference between a stressful, chaotic build and a gratifying and efficient one.
