ProjectManager
by Quincy Yarbrough | May 21, 2021If you’ve ever worked on a large-scale project—especially a construction project—you’re familiar with the concept of contract administration. An employer hires a contractor to do work. The two parties come to an agreement on what the work will be, how long it will take and how much it is worth. These details are outlined and solidified in an official document; a contract.
But what exactly goes into creating these documents? Drawing up a contract is not as simple as two parties sitting down and having a conversation. Contract administration requires just as much attention and care as any other aspect of the work.
Contract administration is the process of creating a contract between employer and contractor. The process ends when the contract is agreed upon and everyone has signed the dotted line. These documents are created to protect both sides of the agreement in case something goes wrong or needs to be changed.
Those are the beginning and endpoints of contract administration, but in between, there is lots of work to be done such as planning, estimating and contract bidding. The first step is to understand the wants and needs of each party. This is no simple task, and it involves time and effort. Then, the contract administrator puts these wants, needs, expectations, etc. into a written form that is easy to understand and refer back to.
Contract administration can be a long process, especially if it is the first time an employer and contractor are working together. It can also be drawn out, as the project planning process might necessitate changes to the contract. All of these changes and tweaks, as well as initial negotiations, meetings and more, fall under the umbrella of contract administration.
A contract administrator is typically a third party with extensive knowledge of business finance and contract law. A client or someone on the client’s team can sometimes act as the contract administrator, but this is not recommended. When this is the case, contract administration can quickly become one-sided and biased. This can lead to animosity between the owner and the builder.
Contract administrators are hired to act as “go-betweens” for project owners, contractors or subcontractors to represent and communicate both of their expectations. These individuals determine the best ways to make both parties happy and even negotiate for each party, if necessary.
A contract administrator’s duties vary depending on the contract and the type of construction project. Each contract will have a unique set of demands. The consistent factor is clearly defining the terms of the contract and ensuring communication and good relationships between employer and contractor.
Think of the contract administrator as an unbiased mediator. While a contract is being created, there may be errors, disputes and miscommunication. It is the contract administrator’s job to oversee what is happening and produce the best possible version of the contract.
In many ways, a contract administrator is like a couple’s counselor. There doesn’t necessarily have to be an issue in order for the couple to benefit from counseling. But, more often than not, employers and contractors will go back and forth on terms, procurement, pricing and other things until both parties are happy. Having someone dedicated to managing these discussions makes the process run smoother.
A few examples of factors a contract administrator will be responsible for are:
A contract administrator is there to make life easier, create a stronger document and initiate a strong employer/contractor relationship. This contract can make or break the project, as a whole. Miscommunication and misunderstandings are leading causes of project failure, and a great contract administrator can prevent this.
Contract administration is commonly mistaken for contract management, but the two are not synonymous. Contract administration is a process that only takes place before the contract has been finalized. Once the contract is finalized, contract management begins.
A contract administrator is responsible for ensuring both parties are happy with the contract they create together which greatly facilitates the contractor management process. A contract manager, on the other hand, deals with contracts during the project itself. This takes the form of answering questions, making changes and mediating conflicts. These two roles require different skill sets and are therefore two distinct roles.
Contract administration will look different from project to project, as each contract will have different terms, agreements, objectives, etc. Still, there are a few basic rules that apply to all types of contract administration:
ProjectManager is a cloud-based project management software that organizes everything to do with your project, from contracts made with vendors and contractors to project plans and reports. With our powerful software, construction projects and contract administration are made much easier.
ProjectManager makes it easy to upload all of your important documents in one central location. This includes your contract, in all its stages. This means no more jumping between different tabs and windows to refer back to key documents and correspondences. After uploading your documents into our tool, you can add comments and tag users so they don’t miss a thing.
When all your documents live in one place, you also can refer to project plans, schedules and more as the contract is being written. A project plan, especially, will contain pertinent information to include in the final document. Monitor the progression of your project on our robust Gantt charts and update contracts accordingly, all from one tool.
ProjectManager’s real-time dashboards give construction project managers a birds-eye-view of the project’s performance to ensure contractors keep to the terms and conditions of the contracts. With us, you get features that facilitate both contract administration and construction project management.
Contract administration is very important across different industries. As long as there are project owners, contractors and subcontractors, you’ll need contracts to manage projects successfully. Here are some examples of commonly used contracts for project management.
ProjectManager is award-winning software that helps projects run more efficiently. From online Gantt charts for visual planning to a collaborative platform that helps teams work better together, every aspect of your project management is covered. Join the tens of thousands of teams already using our tool and take this 30-day trial today.
