Integral to the success of a construction business is the efficient and effective management of its contracts. Sound contract management is essential to ensure that a building company’s legal obligations are upheld, prescribed timeframes are achieved, potential disputes are minimised, and that a construction project is completed profitably.
Contract management often commences at the procurement stage. Ideally, this encompasses the initial negotiating, drafting, reviewing, amending, approving and signing-off of an agreement. This is not always the case however, and at the least, the implementation and management of a contract that is already on-foot should flag potential issues that may be addressed in future contracts or at the renewal phase.
A good contract manager will undertake ongoing review and assessment to mitigate loss and to minimise the risk of leaving the company open to liability.
The functions of contract management include:
- Undertaking a thorough appraisal of a contract to ensure all terms and provisions can be performed and to flag potential delays and areas of concern.
- Diarising critical dates and monitoring and managing the progress of works to ensure claims for EOTs (extensions of time) can be secured.
- Providing notification, negotiating and documenting variations in accordance with the terms of the contract to ensure they are agreed and approved.
- Implementing checklists to identify defects and supervising rectification works, noting relevant defects liability and warranty periods.
- Submitting and monitoring payment claims.
- Negotiating with contractors, third parties, and managing disputes.
- Arranging inspections and certifications.
Good contract management can be complex and time consuming, particularly in the construction industry when time is often of the essence and multiple projects are running simultaneously. Failure to appreciate the full legal implications of a contract however, and to adopt a meticulous approach to contract management can result in substantial losses and repeated errors for a company.
Trying to manage various contracts while supervising the day-to-day operations and construction management of a building practice, may lead to oversights, leaving your business vulnerable and in danger of financial loss. Outsourcing this function to professionals with legal knowledge and practical expertise within the industry can be an effective means of minimising risk and enhancing profitability.
Our building and construction team combines years of practical construction knowledge with legal expertise to deliver contract management solutions for a range of contracts and building projects, large and small.