INTRODUCTION

"Every contract imposes a duty of good faith and fair dealing in the performance of the contract, including and honest and sincere intention to fulfill one's obligations".

These words capture the essence of the broad purpose of contract administration. They help answer the first two questions frequently asked about contract administration:

     1.       What is Contract Administration?

     2.       What is the Role of the Contract Administrator?

The contract administration functions and the duties of the contract administrator ensure that the parties to a contract fulfill their contractual obligations. In additions, claims and disputes can have a disruptive effect on any construction project.  Therefore, good planning for successful contract execution requires three major elements:

1)    Proper, Complete, Clear and Complementary Set of Tender Documents during the tender stage, which in turn will make up the Contract Documents (your first life saver!).

2)    Fair and Firm Administration of the Contract between the Parties for Successful Completion of the engineering and construction projects on time and within budget, and with minimal claims and disputes.

3)    Avoidance and Mitigation of detrimental Claims during the contract period through good-faith negotiations and proper documentation.

4)    Practical, less confrontation of resolving contract disputes through effective and practical Alternative Dispute Resolutions.

Dr. AlBahar, President of PROMIS, Project Management Engineering Systems, is an expert in construction contracts and claims analysis and project management tools and techniques. His recent consulting work is focusing on analysis of delay claims using CPM schedules and amicable settlement of disputes between Clients and Contractors. Dr. AlBahar is a frequent regional and international speaker on all subjects related to project management, construction contracts, tendering procedures, claims analysis and evaluation, contract administration and management, and value engineering.

Dr. AlBahar is a registered arbitrator in the Emirate of Dubai, U.A.E., the State of Kuwait, and was a full time professor at Kuwait University where he taught project management, contracts and specifications, construction management, construction methods, surveying, legal, social and ethical aspects of engineering. He was formerly a marketing and business development manager for Morrison Knudsen Corporation in San Francisco, California

Dr. AlBahar has conducted over 500 public and in-house training courses in the last 25 years on subjects related to contracts, claims, project management, PMP Exam Preparation Workshops, value engineering, budgeting and cost estimating and effective project administrative procedures. His most recent consulting agreement, and as part of team, was to review and rewrite the General Conditions of Contracts and Consultancy Agreement (both General and Particular) for Dubai Municipality and Public Works in Abu Dhabi. He is a Contract Advisor for Qatar Petroleum, Doha, Qatar.

DAY ONE

Preparing and Executing the Contract Documents

MAKING THE AWARD 

• Pre-Award Consideration
• Letter of Intent/ Letter of Award
• Resolve exceptions and open issues before awarding the contract
• Hold a pre-award meeting
• Review final Commercial and Technical Requirements and Issues
• Bonds and Insurance Requirements as per the Contract

THE CONTRACT AGREEMENT 

• Drafting Owner/Contractor (Supplier) Agreement
• Requirements of the agreement
• Preparation of the agreement
• The Contract Documents Contents
• Contractor’s obligations
• Risk allocation between the two parties (shifting) and claims avoidance clauses
• Contract close out procedures
• Contract signing / termination
• Rules for interpreting contracts
• Implied vs. Explicit language of contracts
• Specific duties of the Contract Administrator
• Key Contract Administration Activities
• Understanding the contractual relationship
• Ethics!
• Signing the Contract Agreement

DAY TWO

What is Contract Administration?

THE COMMUNICATION PROCESS! 

• The Pre-Construction "Kick-Off" Meeting  - its purpose, agenda and power!
• Setting a Formal and Systematic Documentation and Tracking Procedures of Submittals and Correspondences between the contracted parties
• Problem language to Avoid
• Communicating Prior Experience and Facts, not opinions!
• Guarding against assumptions
• Effective job start up and planning
• Check list of contract actions
• Preparation of detailed contract schedule and updates
• The Conditions of Contracts and its relationship to Contract Administration and Potential Claims
• Essentials of effective project documentation                                                                                    (The secret for better contract management and administration..!)

DAY THREE

The Tools of Contract Administration

ORGANIZATION, ADMINISTRATION AND OPERATIONS OF CONTRACTS 

• Contractor-Owner relationship
• Assigning Owner's duties, functions, responsibilities and obligations
• Communication techniques
• Some proven people principles
• Required Meetings and Notices
• Records and Documents needed                                                                                                       (The key to successful contracting..!!
• Interface co-ordination
• Monitoring and Measuring Physical Progress and Accomplishment on Site

SCHEDULE AND PROGRESS OF WORK 

• Owner's and Contractor's schedule, static vs. dynamic schedule
• The "ideal" schedule, if any!
• Project Schedule implementation
• Project Schedule enforcement
• Schedule impacts
• Monitoring job progress
• Schedule recovery
• Case Study - Delay Analysis Workshop

CHANGES, VARIATIONS AND EXTRA WORK 

• Some tips on changes and variation orders - AVOID, if not minimize!
• Origin and types of changes and variations
• Processing the change or Variation Orders
• Change notices (actual notice vs. constructive notice)
• Changes and variations control methods - it is in the Owner's hands!
• Contractor's proposal evaluation
• Valuation of Variations
• Negotiating and pricing variations orders - Come to an agreement before starting, or else!

QUALITY AND INSPECTION

• Quality assurance and control (measurable vs. subjective methods)
• Inspection by third party and surveillance
• Responsibilities of the parties

PAYMENT FOR WORK 

• Measurement of completed work
• Invoicing practices
• Verification of Invoices
• Payment for changes and extra work - separate or together!
• Equipment and material not installed
• Release of retention

SUBCONTRACTORS AND SUPPLIERS 

• The role of the owner (nominated subcontractors)
• The role of the contractor
• The subcontractor and lower tiers
• Defining the subcontractor scope
• Flow down of contract provisions

DAY FOUR

Problems and Solutions in Contract Administration

TYPICAL MAJOR CLAIMS AND CAUSES 

• Allocation or sharing of construction risks
• Known and known/unknown risks
• Expressed vs. implied contract terms
• Delays and concurrent delays
• Acceleration (directed vs. constructive)
• Impact on productivity (loss of productivity by contractor)
• Changes/modifications and variations and extra work
• Time requested but not granted
• Adverse physical conditions
• Payment issue
• Competency of owner management

RECOGNIZING AND DOCUMENTING CLAIMS 

• COST ANALYSIS
  • Need for Detailed Budget
  • Budget vs. Actual
  • Variance Analysis
•  TIME ANALYSIS
  • As-Planned Schedule
  • Monitoring job progress
  • Compared to Actual
  • Reasons for Difference
  • Delay analysis and documentation

THE PRINCIPAL CONTRACT CLAUSES THAT APPLY TO THE PRESENTATION AND DEFENCE OF CONSTRUCTION CLAIMS 

Variations / Change Orders

• Differing Site Conditions / Adverse Physical Conditions
• Extra Work
• Site Access
• Time Extensions
• Suspensions of Work
• Delay, Disruption, and Acceleration
• Negotiation and pricing variation orders

 DAY FIVE

CLAIMS DEFENCE, ANALYSIS, AND NEGOTIATION

1.     CLAIMS DEFENSES 

• Early Contract Planning – your life saver!
• Early Recognition and Analysis
• Demanding Engineer’s Response
• Isolating the Issues
• Time Impact Analysis
• Cost Exposure Analysis
• Factual Defences
• Legal Defences
• Tactical Considerations

2.     ANALYZING THE CLAIM 

• Entitlement
• Cause and Effect
• Length
• Accuracy and Content
• Use of Charts and CPM Networks

3.     CONTRACTUAL ENTITLEMENT FOR CLAIMS

• Dispute over the applicability of express contract terms
• Dispute over implied contract terms
• Entitlement from the Owner’s perspective
• Entitlement from the Contractor’s perspective
• Entitlement from a third party perspective
• General recovery theories
• Payment issues