Contracts Management In The Construction Industry

Created by Sub Admin in Articles 3 Apr 2024

Introduction:

In a project
with multitude of disciplines working in tandem towards a common objective,
each discipline is given noticeable importance at some or the other in a
project lifecycle, for example: during the early stages, there is more focus on
engineering than let’s say during middle & end stages where procurement and
/ or construction are on the driving seat. One of the underrated disciplines in
a project is Contracts Management. The mechanisms of a Contract are always in
motion, silently working in the background to adapt to the everchanging playing
field.

A contract
holds the key to regulate the project, wherein it binds two or more parties
into a legally enforceable agreement that defines and governs their respective
obligations. At pre-award stage, it integrates personnel, processes,
methodologies to manage the project, so that at post-award stage, it can save
time, improve performance, mitigate delays, manage risks and add value to the
project.

Typical
Contracts Lifecycle Management process involves:

·
Prepare
and propose: Recognize all essential documents and link them to support the
purpose.

·
Draft
and negotiate: Use boiler plate templates and combine them with clear business
rules and terms to minimize the negotiation time.

·
Execute
and manage: After review and completing internal approvals, authorized
personnel from each party executes the contract by signing. Thereafter,
management of respective obligations and responsibilities begin.

·
Change
and renew: Recognize occurrences that deviates from the contract and formalize
them, in writing, vide variations, amendments, change orders or renew for a
particular period.

·
Close-out
and Exit: Upon fulfilling all the respective duties, parties close out the
contract through attaining acceptance certificates and waive off their rights
on liabilities towards each other with clearance forms.