Contract Administration In Construction

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What is contract administration in construction?

Put simply, contract administration in construction is the process of managing contracts of all parties involved in the project - from the first stage of drafting and signing the contracts through to completion. In any construction project, contracts will be needed for employees, contractors and clients, and the contract administrator/s will be the first point of contact for any queries or contract changes. 

An essential part of contract administration involves ensuring compliance from all individual traders, companies and organisations involved, to safeguard success. Although it can be a challenging and busy role, this position is essential in fostering positive relationships, building smooth working practices, mitigating risks and making sure all project objectives are achieved.

What is the role of contract administrator in construction?

The role of the contract administration process in construction begins long before any building work starts. As well as preparing and updating contracts and subcontracts when necessary, the contract administrator will be involved in other key aspects of the project, including:

• Interpreting contracts and negotiating terms - as well as negotiating, analysing contracts and agreeing on mutually acceptable changes, contract administrators interpret clauses of the many types of construction contracts and ensure all terms are kept to. Excellent clarity and communication skills are vital. 
   

• Ensuring compliance - this may include managing extensions, resolving disputes, attending regular on-site meetings, applying for building regulations approval and liaising with all parties in a productive and proactive way. Essential skills include effective negotiation and a comprehensive understanding of legal and construction principles.
   

• Coordinating between stakeholders - the contract administrator will help with procurement schedules, process claims and resolve any errors or unforeseen issues which arise. A construction contract administration role is the central point of contact to streamline the process and project progress and avoid any contractual risks or breaches which may cause delays or legal problems.

Contract administration in construction projects

Any contract administration process in construction is diverse and wide-ranging, involving multiple parties and strict timescales. From early contract preparation and processing tender applications to procuring building materials agreements, signing off accounts or expenses, reporting defects and approving payments, the role of construction contract administration needs a broad experience and knowledge base, requiring:

• Industry-specific considerations: although general legal and contract knowledge is useful, knowledge of construction regulations and codes is essential. The role liaises with skilled individuals, large and small companies, clients, site managers, planning and building control, as well as assisting with project timelines, scope changes and ensuring compliance with the latest building regs.
   

• Integration with project management: the role will involve overlap with health and safety roles, planning conditions, finance and quality checking. The project manager and the contract administrator work closely together to ensure timelines and project goals are met, on time and on budget.
   

• Risk management and variations: as well as keeping up to date with external risk factors, such as inclement weather which may cause delays, the contract administrator will amend and update contracts when necessary. They may be required to lead meetings, agree testing schedules and arrange compliance and quality monitoring.

Different stages of a construction contract

Any construction project has a series of stages, each involving the contract administrator, from the initial tender stage - to put forward a bid in the hope of winning the contract - to the design and planning, through to the construction stage and finally the final sign-off and completion. Each stage has its unique challenges, but the most risky in terms of costs and time management is the construction phase. 

Here are the common stages of a construction contract:

Initial design stage

Also known as the initiation stage, the initial phase of any project - small or large - involves looking at the feasibility, the design and drawing up contract documents. During this planning stage, a project initiation document is drawn up, as well as a detailed plan of materials, engineering plans, planning permission administration, the workforce needed and the contracts required.

The procurement stage

The procurement - or pre-construction phase - involves sourcing materials, equipment and additional services that are needed to make sure the project is completed on time and on budget. A key part of this stage includes the contract management phase, where the contract administrator will make sure that all contracts are being fulfilled so far, and will seek to solve any problems or make amendments if needed.

The construction stage

After the planning has been completed, the construction phase can begin. At this point a contract administrator will be heavily involved in ensuring compliance, helping to assist with any contractual problems and will commonly need to re-negotiate extensions or variations as the project progresses. Time management and risk mitigation are essential in this phase.

Handover and completion stage

Also known as post construction, this is where the handover and final accounting occurs, making sure payments and all contracts are completed and signed off, as well as building regulations, final quality checks and any snags fixed. A completion document will be provided, and all paperwork and contracts will be filed in case of any dispute further down the line.

Best practices for effective contract administration

As well as being organised, proactive and having a working knowledge of construction and contractual obligations, effective communication is key to successful contract administration. It’s also essential to:

• Ensure clarity in all contracts

• Pre agree costs and terms for amendments or extensions

• Be proactive in communicating with all parties

• Provide regular progress reports

• Keep comprehensive documentation and record all discussions related to contractual updates

• Be involved in ongoing training

• Maintain communication channels between key stakeholders and agencies

• Stay up to date with external factors which may affect timescales (such as supply issues, illness or storms)

• Keep up to date with any changing laws or regulations

• Evaluate contractors’ performance

• Make a post-completion report of what went wrong and how it can be avoided in future

Initiating and concluding the process

The contract administration process in construction is vital through all stages - from planning, which contracts will be needed, to preparing contracts, administering tender applications, agreeing rates, ensuring contracts are signed, maintaining compliance, updating contracts, and finally concluding final contracts and sign-off. The contract administrator will be involved in continuous improvement, rating suppliers and keeping in-depth records throughout - and after - the project has been completed.

Construction Contract Administration: FAQs

What is JCT contract administration in construction?

The Joint Contracts Tribunal, or JCT, is a professional group that offers standard or ready-to-use contracts for the construction industry. JCT contract administration is the process of managing the terms of the contract itself, making sure all parties uphold their conditions and responsibilities.

What is the difference between construction management and contract administration?

The construction manager oversees all aspects of a project from beginning to end, whereas the contract administration construction process is usually undertaken by a nominated engineer, project manager or experienced contracts professional. The contract administrator manages the signing of agreements and ensures terms and conditions are met.

What is a contract administration in a construction job?

A contract administration construction job manages the agreements of all parties involved - from the first stage of drafting contracts through to the project’s completion. As well as needing in-depth knowledge of construction legalities and processes, an essential part of contract administration involves ensuring compliance, requiring excellent communication and negotiation skills.

The role of contract administration in any construction project is essential, to minimise risks, keep unforeseen costs down and ensure compliance, making sure best-practice leads to the very best results. You can read more, or download, a sample construction contract template here.

For up-to-date articles on the different types of construction contracts, as well as inspiration and advice, visit the Travis Perkins Trade News Hub for more information on personal safety, construction safety and modern methods of construction.

Disclaimer: The information contained on this page is intended as an overall introduction and is not intended as advice from a professional. Travis Perkins aims to avoid, but accepts no liability, in the case that any information stated is out of date.