The essential role of contract administration on projects

Contract Administration (CA) is a critical function in construction projects, a dedicated role solely focused on administering contracts between the parties involved in the works, ensuring that agreements between parties are upheld and adhered to.

Typically, these parties refer to the ‘Employer’ (i.e. the client) who commissions the work, and the ‘Contractor’, who delivers the work. Responsible for executing the specific elements of the project, contractors are expected to provide the necessary staff, expertise and management which can include design work.

The CA function puts the contract itself front and centre, and provides an impartial check and balance to make sure that what has been contractually agreed is actually what happens.

The role of the Contract Administrator

According to the RICS, the role of the CA has been in existence for centuries, though the term was only formalised in 1987!

The CA oversees and enforces contractual obligations, and key responsibilities include:

Preparing a package detailing what works are to be carried out, which may include a schedule of works, drawings, and possibly details for specified products for tendering
Managing the tender process on a range of suitable contractors and receiving prices
Checking works to ensure these are being completed in accordance with the contract.
Resolving disputes relating to workmanship, material specification or project timelines

The CA administers the contract between two parties and is expected to be impartial in its decision-making functions. While the CA is acting as an agent of the Employer, both parties can challenge the decision of the CA through dispute resolution procedures.

Does a Contract Administrator have to be a Building Surveyor?

The short answer is no, you don’t need a Building Surveyor to be a CA.
However, the choice depends on the project type, and the appropriate expertise required to design or prepare detailed specification, i.e. what tasks are going to be done as part of the project and what components or products will be used, accompanied by guidance on technical details, instructions or drawings.

Building surveyors in the role of CA is particularly helpful when it comes to projects requiring repairs and maintenance to external or internal fabric of an existing building. Building Surveyors are the most well-rounded profession to understand the complex needs of an existing property building when it comes to maintenance and upkeep.

Contract Administrator vs. Project Manager

We are often asked the difference between the two functions of Project Manager and Contract Administrator on a project. While SRVO’s team regularly acts in the capacity of PM and CA, the two disciplines are not interchangeable on a project.

A Project Manager is a project ‘leader’, specialising in in bringing together and managing the output and programme for a multi-disciplinary team of professionals to deliver components of a project. This skill set makes them suited to running large and complex projects involving architects and engineers to design a building or fit out a property. While a CA ensures contractual compliance, a PM manages timelines, budgets, and overall project coordination. The two roles complement each other but require different skill sets and both have a role to play in enabling successful projects.

Can the Client provide the CA function on a project?

While it is possible for a client (or the ‘Employer’ in the contract) to act as their own Contract administrator, doing so requires significant experience relating to

Technical specification writing
Project design
Detailed technical understanding of the building
Fluency in administering legal contractual matters
Capacity to take legal responsibility for the outcomes
Be comfortable with negotiating costs and accounts
Be able to assess works by a contractor.

Given the complexity of the requirements and the legal implications of the role, utilising a professional Contract Administrator is always recommended to ensure a client mitigates against risk and facilitates the long-term project success.

The value of a formal contract
There should always be some form of written contract setting out the rights, expectations and responsibilities of each party, to prevent disputes and provide a structure for resolution.

KEY TAKEAWAYS

Both the client and the contractor can challenge the decision of the CA
The Contract Administrator is not the same as the Project Manager; a CA enforces contract terms, while a PM oversees project execution
Contract Administration is a complex and wide-ranging role requiring technical, legal and managerial experience
Terms provided solely by one party may not always be in the best interest of all, formal agreements with impartial checks are advisable

By maintaining an objective, structured approach, the professional CA has an important role to play in safeguarding project timelines, budgets, quality standards and protecting the interests of all parties. The impartiality of the CA, allows the Client and Contractor to focus on the day-to-day elements of the job, with a more pragmatic relationship. Contract Administration is a fascinating subject which, when done well, can add exceptional value to the project overall.