Contract Administration

Question 1

What are the main duties of a contract administrator during the construction phase?

Answer 1

The primary duties of a contract administrator during the construction phase include:

Site Inspections:
Regularly visiting the site to ensure work is proceeding in accordance with the contract documents and the project timeline.

Issuing Instructions:
Providing instructions to the contractor when necessary, including clarifications or additional works, in accordance with the terms of the contract.

Assessing Variations:
Reviewing and assessing any changes to the work, such as variations, and their impact on cost, time, and quality.

Certifying Payments:
Issuing interim payment certificates based on work completed, and ensuring the contractor is paid in accordance with the terms of the contract.

Managing Delays:
Identifying delays or potential delays and working with the contractor to mitigate them. If necessary, granting extensions of time.

Managing Claims:
Evaluating and managing any claims for additional time, cost, or other circumstances that arise during the project.

Ensuring Quality Control:
Ensuring the contractor complies with the contract specifications and quality standards, and addressing any non-conformance.

Final Account:
Ensuring the final account is agreed and closed out at the end of the project.

Question 2

How do you assess the validity of a contractor’s claim for an extension of time under a construction contract?

Answer 2

To assess the validity of a contractor’s claim for an extension of time (EoT), you would typically follow these steps:

1. Review Contract Terms: First, check the contract to see the specific provisions regarding extensions of time, including the grounds on which an EoT may be granted.
2. Cause of Delay: Assess whether the cause of the delay is a relevant event under the contract, such as:

Delays caused by the employer (e.g., late provision of site access, delayed instructions, etc.).

Delays caused by exceptional weather conditions.

Delays due to force majeure events (e.g., strikes, national emergencies).

Delays due to unforeseen conditions that could not have been reasonably anticipated.

3. Critical Path Analysis: Check if the delay has impacted the critical path of the project. A delay not affecting the critical path might not justify an EoT.
4. Notification Requirements: Ensure the contractor has followed the proper procedure for notifying the employer of the delay and requesting an EoT within the required time frame as specified in the contract.
5. Mitigation Efforts: Consider whether the contractor took reasonable steps to mitigate the delay or reduce its impact.
6. Supporting Evidence: Request detailed documentation from the contractor supporting their claim, including the cause, period of delay, and any relevant records (e.g., correspondence, progress reports, site records).
7. Independent Assessment: If necessary, seek the input of specialists (e.g., a delay expert) to assess the impact of the delay on the project.

Question 3

What are the different types of construction contracts, and how does contract administration vary for each?

Answer 3

There are several types of construction contracts, and the role of the contract administrator may vary depending on the form chosen. Some common types include:

Lump Sum Contracts: The contractor agrees to complete the works for a fixed price. Contract administration in this case involves monitoring progress against the agreed lump sum, ensuring the contractor performs in accordance with the scope, and managing any variations or changes to the scope.

Measurement Contracts (e.g., NEC, JCT): Payment is based on quantities measured as the work progresses. The contract administrator’s role involves ensuring that measurements are accurate and that the contractor is paid for the actual work completed as per the agreed rates.

Cost Plus Contracts: The employer agrees to pay the contractor for the actual cost of work plus a fixed fee or percentage. In these contracts, the contract administrator’s role is to verify costs, ensure transparency, and ensure compliance with the contract’s stipulations on allowable expenses and profit.

Design and Build Contracts: The contractor is responsible for both the design and construction of the project. The contract administrator’s role is to ensure that the design meets the required standards and that the project proceeds according to the agreed timeline and budget. This requires close coordination with the design team and the contractor.

For each contract type, the contract administrator’s role varies in terms of how payment is certified, how variations are handled, and how risk is allocated between the parties. The contract administration process must be closely aligned with the specific contract conditions.

Question 4

How do you deal with a dispute between the client and contractor regarding a variation?

Answer 4

When a dispute arises regarding a variation, the contract administrator should take the following steps to resolve the issue:

1. Review the Contract: Check the contract terms related to variations. Ensure the variation was properly instructed and documented.
2. Documentation Review: Review the contractor’s submission, including pricing for the variation, and any supporting documents (e.g., quotations, alternative proposals).
3. Communication: Open a dialogue with both parties to clarify the reasons for the disagreement. This helps to identify whether there is a misunderstanding or if the dispute is due to a contractual issue.
4. Negotiation: If appropriate, attempt to negotiate a fair settlement, considering the best interests of both parties while staying within the boundaries of the contract.
5. Third-Party Mediation or Adjudication: If a resolution cannot be reached, consider using an independent third-party mediator or adjudicator to provide an impartial view and suggest a resolution. In construction contracts, adjudication is often the first method of dispute resolution before moving to arbitration or litigation.
6. Formal Decision: If mediation or negotiation fails, the contract administrator may need to issue a formal decision regarding the variation, which both parties can then either accept or dispute further according to the contract’s dispute resolution process.