Module 003: Construction Contract Management …

1 National Council for Construction Training Manual Introduction to Contract Management and Administration Module 003: Construction Contract Management and Administration Module code: NCC/WB/003 Level: A+B CPD Points: Guided learning hours: 50 hours Developed for NCC by: Dr. E. Mwanaumo Prof. M. Muya Dr L. Matakala Ms B. Mwiya Mr C. Kaliba Mr S. Sanga Aim and purpose This Module will trace the contractual process from pre-tender stage to taking over, where the standard Contract Management and administration process is followed. An overview of various general conditions of Contract will be discussed as well as the pre-award issues.

2 Delegates will therefore gain an understanding of the entire process of Contract Management and administration, from the initiation of the project to its completion and taking over. Checklists of documents required, time charts and other tools of contracting will be discussed. Learning outcomes On completion of this Module a learner should: 1. Know the basic Contract Management process 2. Be able to administer the Contract from post Contract to completion stage. 3. Be able to generate a record of documents required for project Contract administration and project file. 4. Understand the cycle of Contract Management relative to Construction projects.

3 5. Understand the use of Contract documentations. National Council for Construction Training Manual Introduction to Contract Management and Administration Module Overview Contract Management and administration involves making decisions and the timely flow of information and decisions to enable completion of the project as required by the Contract documents including review and observation of the Construction project. This is important to the client, contractor and Consultant not only to determine that the work is proceeding in conformity with the Contract documents, but also because it allows a final opportunity to detect any inaccuracies, ambiguities or inconsistencies in the design.

4 The objective of this Module is to improve Construction Contract administration by providing education related to the administration and enforcement of Contract requirements during the Construction phase of the project. This Module will take the individual beyond the business as usual approach followed in the Construction industry. Although some of the same topics may overlap with other modules, the depth of understanding and explanation as applicable to each Module will provided needed skills to enhance improved Construction performance. This basic course includes, Construction Industry participants, Bidding Requirements and Process, alternatives and Substitutions, standards and Regulatory Influences, Site Activities, Execution of the Work, Certificate of Payment, Changes in the Work, Dispute Resolution, Construction Insurance, Construction Surety Bonds, Guaranties and Warranties, Project Submittal, Contract Close-Out, Commissioning, Definitions and Resources.

5 Designed for: The course is designed for those individuals involved in Construction administration, including contractors, site engineers, General foremen, Contract Administrators, Property Managers, Architects, Engineers, Quantity surveyors, bonding and Insurance Agencies Page | ii National Council for Construction Training Manual Introduction to Contract Management and Administration National Council for Construction Training Manual Introduction to Contract Management and Administration INTRODUCTION TO CONTRACTION Management AND ADMINISTRATION Course Contents A Contract .

6 1 What is Contract Management ? .. 1 Management of Civil Works Contracts .. 2 Different Types of Construction Contracts .. 3 Lump Sum or Fixed Price Contract .. 3 Cost Plus Contracts .. 5 Unit Price Contracts .. 6 Time and Material Contracts .. 6 Construction Condition of contracts .. 6 Communications .. 7 Managing time .. 7 Programme .. 8 Extensions of time .. 8 Completion .. 8 Early completion .. 9 Penalties for late completion .. 9 Changes to the prices for the works .. 9 Construction process .. 10 Allowable rates .. 10 Resourcing the project .. 11 What is administration? .. 12 Record keeping.

7 13 13 Site diary .. 13 Drawing register .. 14 Written notices, correspondence and site 15 Site photographs .. 15 Contractual documents .. 16 Understanding the Contract Documents .. 16 Various documents constitute the Contract documents that are the basis of the Contract . 16 Construction Contract 17 Essentials Quality Control .. 24 Page | v National Council for Construction Training Manual Introduction to Contract Management and Administration Quality Plan .. 24 Quality Improvement Process .. 25 Management commitment .. 25 The quality improvement team .. 25 Consistency of work and standardisation.

8 25 Measurement of the Price of Non - Conformance (PONC) .. 26 Cost of quality .. 26 Sample Site Forms and Reports (Civil Works Contracts) .. 28 Sample Issues Log (Civil Works Contracts) .. 31 Checklist Compliance with FIDIC Conditions of Contract .. 33 Page | vi National Council for Construction Training Manual Introduction to Contract Management and Administration A Contract A Construction Contract is a legally binding agreement between two parties on the details and cost of a Construction project. This type of Contract covers very expensive, complex projects and simple renovations.

9 There are two types of clients that use Construction contracts: residential and commercial. Each client has different requirements that determine what is included in the Contract . A residential Construction Contract includes three basic elements: project scope, schedule of work and payment details. The project scope is a statement of exactly what Construction work is included in the Contract . Both parties must agree that this section provides an exact representation of the required work. The payment details section includes the total project cost and payment dates. All Construction projects are paid on a percentage of completion basis.

10 A deposit of no more than five percent of the total costs is provided at the start of the project. The next payment is made when the predefined section of work is completed. Contract life Cycle WHAT IS Contract Management ? Contract Management could be defined as a multi-stage process that goes on through the entire duration of the Contract and ensures that the parties meet their contractual obligations in order to deliver the specific objectives provided in the Contract . Page | 1 National Council for Construction Training Manual Introduction to Contract Management and Administration The main purpose of Contract Management is to make sure that the objectives of the Contract (supply of goods, delivery of services or execution of works) are met in a timely fashion and value for money is achieved.