An essential part of a construction company’s daily routine is the administration of contracts, between it and suppliers, sub-contractors, or clients. All payments and delivery terms will be detailed within a contract, with any disputes generally settled by reference to it. This is why contact administration is important to the smooth running of individual projects, its components, and the construction company as a whole.
Essentially there are three parts to a contract, which is best produced as a formal written document:
- The request for services/ goods
- The offer of said services/ goods
- The conditions of the contract
It’s common to use a standard contract (published by the State government and building industry associations), but even so it will need to be reviewed for understanding and agreement before signing: if there is any confusion, then professional guidance should be sought.
Important contract clauses
Some of the most important terms of a contract cover payments, progress claim periods, delays in payments, and retention of payments.
The majority of residential works contracts are lump sum fixed price style, with amounts based upon detailed drawings and specifications. Care should be taken to detail circumstances under which amounts or delivery terms may alter with ambiguity avoided.
Other contracts may be agreed with a schedule of rates, allowing charging to be detailed as to job specification. For example, bricklayers may charge per thousand bricks, while tillers may charge per square metre.
Contract administration requires accurate recoding of works progress with reference to quality, quantity, and timeliness.
Records of all instructions, events, and variations should be kept to minimise risks of conflicts and disputes.
It is also common for the scope of original works to change during progress toward completion, and these will need to be detailed fully, referenced throughout, and signed-off by all interested parties.
Other contract administrative tasks include:
- Maintaining records of goods ownership
- Provisional and final costs
The Blueprint CPD Contract Administration course, like all of our courses, can be taken at a time to suit you and will count toward your required CPD points. It covers all of the above aspects of contract administration and will help you ensure there are no costly gaps in any contract written and agreed.