What is Construction Contract Management?

A contract is a promise or set of promises which the law will enforce.

Building contracts relate to the distribution of services or goods as part of an asset's delivery. Traditionally, providers might have been regarded as organizations contracted to provide physical supplies such as goods, materials, plant and so forth, nevertheless, PAS 1192-2 currently defines a supplier as some, a provider of goods or services directly to the company or to a different supplier at a supply chain'.

Construction contracts are generally forms, altered types of bespoke.

Contract management is the process of managing contracts that are made as part of their delivery of a built strength. It includes the development, analysis, and execution of contracts by the parties to those contracts to ensure operational and financial performance is maximized, and risks are minimized.

Contract management can be categorized into three phases:

• Pre-contract stage: Contract negotiation is undertaken and Tenders documents are ready, tenders are sought.
• Contract execution period: Last contract documents are ready for implementation
• Post-award stage: Compliance with terms of this contract.

A contract manager might be identified to manage one, or several contracts, or to work as part of a team of contract managers. On large, complex projects, involving several contracts (such as a construction management project) a consultant might be appointed to perform the role of the contract manager.

The role of contract manager include:

• Assessing the needs of the business or project.
• Assessing the market.
• Risk assessment.
• Determining procurement methods and tender assessment criteria.
• Preparing a contract management strategy.
• Preparing budgets and cost estimates.
• Preparing programmes.
• Selecting the form of contract.
• Preparing tender documents.
• Seeking tenders.
• Negotiating contract conditions.
• Contract engrossment and execution.
• Briefing project teams, contractors and suppliers.
• Being the point of contact for the parties to the contract.
• Relationship management.
• Contract administration.
• Managing variations to the works.
• Supplying information to resolve disputes.
• Preparing information for the completion of contracts.

An effective contract management strategy can bring a number of benefits to this process:

• Expected business benefits and financial returns are more likely to be realized.
• Good working relations can be maintained with contract partners and subcontractors, and so there is a reduced risk of disputes and a higher chance of repeat work.
• There are fewer unforeseen events.
• Contract partners, subcontractors, and suppliers are likely to be more cooperative and responsive.

Contract management can be a complex process, which can be simplified with the use of contract management software. This can be particularly helpful for contract management involving multiple contracts and multiple parties, creating integrated systems for; document management, change control, relationship management, accounting, project management, contract administration, resource allocation and so on. Specialist software is available for different types of contract management, such as large contracts, small contracts, multiple contracts, civil engineering and so on.

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