Article #058 Managing the Letter of Award for Design and Construction Contracts Process in Construction Projects


Letter of Acceptance also referred to as the “Letter of Award”, is legally considered as the Employer’s formal acceptance of an offer (bid/tender) made by the Contractor, thus forming a valid and binding contract between parties when acknowledged its receipt by the Contractor. Issuance of Letter of Acceptance/Award marks the interface between the procurement stage and construction stage of the project.

Using a Project Management Information System (PMIS) like PMWeb, the issuance of the letter of acceptance can become a process that could be managed and controlled. A customized checklist will be created using PMWeb custom form builder to ensure that all perquisites for issuing the letter of the award have been formally completed and verified by the project manager. For each item in the checklist, relevant supportive documents will be uploaded into the PMWeb document management repository and attached to the checklist. A workflow will be added to the checklist to ensure that it has been formally reviewed before it is approved. Finally, the PMWeb correspondence module will be used to create a template for the letter of acceptance so the correct-worded version will be used across all projects. PMWeb document management repository will also be used to upload and attach all documents that are related to the letter of award.

PMWeb custom form builder will be used to create the letter of acceptance checklist. It will list all items that the project manager needs to confirm that they have been completed before a letter of acceptance can be issued. For each listed item, the project manager will have the option the select the status of compliant, non-compliant, or not applicable. A comments field will be also made available to add any notes the project manager wants to make.

PMWeb document management repository will have a folder titled “Project Initiation”. Under that folder, a subfolder for “Letter of Acceptance” will be created. Under this folder, there will be two subfolders. The first will be “LoA Checklist” and the second will be “Letter of Acceptance”. The LoA Checklist folder will be used to upload the supportive documents for the checklist while the letter of acceptance folder will be used for the documents that will be issued along with the formal letter of acceptance.

PMWeb workflow module will be used to create the workflow needed to formally review and approve the LoA Checklist. The checklist which will be usually submitted by the project manager will require review by the head of projects, legal department, finance department, procurement department, and other departments that their input is needed before formally issuing the letter of award.

The Letter of Acceptance/Award should indicate the Accepted Contract Amount in relevant currencies. It should also include a list of documents constituting the contract with their order of priority, if there are new documents forming the Contract, which were not envisaged at the time of preparing bidding documents, such as addenda, and MOUs. The Letter of Award shall not include any new conditions unless previously agreed by parties and such agreements reached between parties have been formalized through a Memorandum of Understanding (MOU). To ensure all those requirements are met, the checklist will include another table to be reviewed and approved.

PMWeb correspondence module will be used to issue the Letter of Acceptance/Award. PMWeb will have a predefined template for the Letter of Acceptance/Award ready to use. The template will highlight all sections that need to complete before issuing the Letter of Acceptance/Award.

The same Letter of Acceptance/Award checklist will also include a third table to ensure that all actions that need to be performed after issuing the Letter of Acceptance/Award are met. It should be noted that the table format for each section can be modified to reflect the requirements of each section of the checklist. For example, in the table for “After Issuing Letter of Acceptance” a new field has been added for the relevant FIDIC clause or sub-clause.

By having the checklist for the Letter of Acceptance/Award, shown below, the organization can enforce governance best practices to ensure the correct issuance of this important communication. In addition, the letter template ensures the right wording of the Letter of Acceptance/Award as well as expedites the issuance of the letter. All supportive documents are captured and stored in the document management repository and the workflow will ensure all needed reviews and approvals have been completed. The same approach could be adopted for all other critical project’s formal communications.

About the Authorfounder

Bassam Samman, PMP, PSP, EVP, GPM is a Senior Project Management Consultant with more than 35-year service record providing project management and controls services to over 100 projects with a total value of over US $5 Billion. Those projects included Commercial, Residential, Education and Healthcare Buildings and Infrastructure, Entertainment and Shopping Malls, Oil and Gas Plants and Refineries, and Telecommunication and Information Technology projects. He is thoroughly experienced in complete project management including project management control systems, computerized project control software, claims analysis/prevention, risk analysis/management (contingency planning), design, supervision, training, and business development.

Bassam is a frequent speaker on topics relating to Project Management, Strategic Project Management, and Project Management Personal Skills. Over the past 35 years, he has lectured at more than 350 events and courses at different locations in the Middle East, North Africa, Europe, and South America. He has written more than 250 articles on project management and project management information systems that were featured in international and regional magazines and newspapers. He is a co-founder of the Project Management Institute- Arabian Gulf Chapter (PMI-AGC) and has served on its board of directors for more than 6 years. He is a certified Project Management Professional (PMP) from the Project Management Institute (PMI), a certified Planning and Scheduling Professional (PSP), and Earned Value Professional (EVP) from the American Association of Cost Engineers (AACE) and Green Project Management (GPM).

Bassam holds a Masters in Engineering Administration (Construction Management) with Faculty Commendation, George Washington University, Washington, D.C., USA, Bachelor in Civil Engineering – Kuwait University, Kuwait and has attended many executive management programs at Harvard Business School, Boston, USA and London Business School, London, UK.


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