Contract Management

• All organisations have some standard

form of contact conditions. Divide the
responsibilities in the following
operational forms

Pre-bid stage

Execution stage

Post-execution stage
 PRE BID STAGE
• Experience of client or his consultant
plays an important role
• Well thought out contract document
• Proper investigation, sound design and
specification
• Specifications to be practical and
practicable
• Specification should be reviewed and
variations clearly mentioned
 PRE BID STAGE (contd.)
• Avoid redundancy
• Avoid use of “satisfaction of Engineer”
or “sound engineering practice”
• Provision for escalation, currency
fluctuations, mobilisation advance and
settlement of disputes
• Avoid mutilation of standard contract
document
• Pre bid meetings and minutes of
meetings should form part of contract
 EXECUTION STAGE
• Attitude of Engineer, Employer and
Contractor creates problems. Sticking to
letter rather than the spirit of contract
• Time is essence of contract.
• Understand importance of timely notices
• Maintenance of all important site
documents
 EXECUTION STAGE (contd.)
Important Site Documents
• Detailed layout plan
• Copy of contract agreements and
drawings
• Bar charts and basic list of stores
including CPM network
• Works site order book
• Works diary
 EXECUTION STAGE (contd.)
Important Site Documents (Contd..)
• Works passing register
• Measurement book
• Register of record of tests on materials,
etc.
 EXECUTION STAGE (contd.)
• Work at site not always proceeds
according to planned programme
• Threat of punishment may sometimes act
as a better tool
• Not possible to provide for all possible
variations
• Promptly issue variation orders
• Promptly issue clarifications of the matter
of interpretations
 EXECUTION STAGE (contd.)
Important contract clauses
• Time delay and extension – liquidated damages
• Suspension; foreclosure or rescission of work
• Recovery for defective work
• Completing the work under risk and cost of
contractor
• Price escalation
• Audit/Technical examiners’ observation
 POST EXECUTION STAGE
• Settle all claims as quick as possible
• Be fair and just on your decisions
• Be bold to convince the technical
examiners/auditors on their unrealistic
observations
• Clear final bill as quick as possible
• Give the list of defects on completion of
work and monitor the progress
Contract Administration

is a process that ensures the successful
completion of the project under consideration
with substantial compliance of the Terms of
the Contract.

As a result, the following activities or tasks are
included in Contract Administration services:
 Identifying contractual responsibilities of
Stakeholders.
 o Reviewing the Terms of Contract Documents
o Extract Monitoring Responsibilities
o Preparing Monitoring Responsibility
Summary Sheets
 Determining and understanding the
construction components of the project.
o Reviewing the Contract Drawings and
Technical Specifications
o Extract the Construction Methods and
Sequences
o Prepare Construction Methods and Over all
Sequences Sheets
Review submitted (Integrated) Schedules and
Breakdowns for operations such as
Organizational Breakdowns, Resources
Breakdowns & Schedules and Time Schedules.
Record, Monitor and Evaluate Progress of
Mobilizations, Works and Completions.
Report Project Status daily and / or
periodically and Completions.
Certify qualities of materials,drawings,
samples, workmanships and works.
Measure Works, Record Site Potentials and
Certify Payments and Completions
o Take off sheet and Schedules are used for
Measurement of Works
o Method of Measurement is according to
standard practices
o Site Potentials such as material, equipment
and Manpower on site together with
appropriate site organization is recorded
o Advance, Interim and Final Payments are
certified
Mediate Disputes.

Such services are carried out to ensure
projects are completed successfully and
 To Follow up and Evaluate Project Cost, Time
and Quality.
 To Ensure Health, Safety and Environmental
Requirements.
To Ensure Project fitness for its purpose or
intended objective.
Contract Administration

Preparation and startup

Requirements

Implementation

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 Contract Administration
Preparation and Start up
1. Review the contract documents
 Identify Contractual Responsibilities of Stakeholders
 Determine and Understand the construction components of the project
 Identify Contract discrepancies
2. Review submitted / Prepare Work, Resources and
Financial programs
 Consider contract discrepancies (at least for in house planning)
 Determine Crew following the construction method selected
 Develop Organization Breakdowns
 Identify various resources
 Revise / Prepare Programs and get approval

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 Reviewing the Contract Documents

1. Identify Contractual Responsibilities of

Stakeholders
 Review the terms of the contract conditions
 Review the terms of references

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 Reviewing the contract document

2. Determine and Understand the construction

components of the project
 Review the contract drawings and technical specifications
 Develop Work breakdown structures
 Extract the construction methods and sequences of
operations
 Prepare overall construction methods and overall
sequences sheet

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 Reviewing the Contract Documents

3. Identify Contract Discrepancies

 Compare design or plan and actual site conditions
 Compare specification, bill of quantities and drawings
 Determine potential extra works, excess in quantities,
variations (additions and omissions)
 Determine potential design changes, cost overrun, time
overrun
 Communicate findings to Consultant and Employer
 Request clarifications and amendments, if necessary

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 Review submitted / Prepare programs

1. Consider contract discrepancies (at least for in house

planning)
 Determine when these discrepancies affect the program
 Assume how fast shall the response be on clarifications and
amendments
 Communicate your assessment on the impact of these
discrepancies

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 Review submitted / Prepare Programs

2. Determine Crew following the construction method

selected
 Define work components into self and sub contract
 Determine sub contractors for sub contracts
 Define standard crews for use
 Define Labor and Equipment requirements and their
productivities
 Determine schedules per crews

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 Review submitted / Prepare programs

3. Develop Organization Breakdowns

 Develop Site Organization structure
 Develop relationships with head office Organization
structure

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 Review submitted / Prepare programs

4. Identify resources and financial sources

 Determine type and quantity of resources
 Decide on Head office Vs Site Supplies
 Decide on Self purchase Vs Suppliers Credit for materials
 Decide on Owned Vs Rented options for Equipments

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 Review submitted / Prepare programs

5. Revise / Prepare Programs and Get Approval

 Determine sequences of operations
 Determine resources requirements
 Prepare the program and get it approved
 Introduce and make known your program to all involved
(a continuous process)

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 Implementation and Quality Assurance
1. Carry out Obligations
2. Request Rights as early as possible
3. Demand and Obtain Remedial Rights

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 Implementation and Quality Assurance
1. Carry out Obligations
• Construction Methods, Resources and Works Approval on time
• Study Instructions and Orders; Process and Plan for
Implementation; Submit impact and Execute as per agreement
• Carry out works in accordance with the contractual conditions
and schedules of requirements
• Record, Supervise or Monitor and Evaluate progresses of
mobilizations, supply of resources and construction works
• Measure completed works
• Insure works, resources, sites and third parties
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 .

Implementation and Quality Assurance

2. Request Rights as early as possible

• Submit clarifications with possible interventions
• Request for joint assessment of critical issues
• Request payments

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 .

Implementation and Quality Assurance

3. Demand and Obtain Remedial Rights

• Carry out exhaustive effort to prevent causes for claims
• Notify intent to claim
• Submit substantiated claims when effect (s) occurred
• Use amicable settlement as much as possible for dispute
settlement

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 Contract Closing

Acceptances and completion

Outstanding issues settlements

Closing accounts

Contract Evaluation

Extra Contractual Liabilities

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 Acceptances and Completions

1. Provisional / Temporary Acceptances (Partial + Total)

2. Provisional / Temporary Completion Certificates
(Partial + Total)
3. Remedying of defects
4. Final Acceptance
5. Final Completion Certificates

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 Outstanding Issues Settlement

1. Temporary rates assigned

2. Payments Withheld
3. Claim issues unsettled
4. Dispute issues unsettled

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 Closing of Accounts

1. Final Completion Certificate Issued

2. All Payments and Entitlements made
3. Retentions, Bonds and Guarantees Released

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 Contract Evaluations

1. Evaluate Contracts Closed

2. Determine Lesson Learned
3. Propose Interventions

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Thank you!