The Royal Institute of Chartered Surveyors (RICS) practice guide on Contract Administration, has detailed the roles and responsibilities of a Contract Administrator in building projects. The role involves managing the contract between the employer and building contractor which can be performed by the engineering consultant, project management consultant, quantity surveyors, cost management consultants as well as a contract administrator who is an employee of the project owner. The RICS guide provided a summary list of the contract administration items that need to be the contract administrator during the pre-commencement, construction, and post-construction phases of a project. The items listed are similar to the roles and responsibilities that a contract administrator or contract manager will perform on projects that might be aligned with RICS best practices guidelines.
The guide listed the key contract administrator tasks that a contractor administrator will generally perform including chairing contract’s related meetings, and periodically inspecting the works but to be made clear to all parties that the responsibility for checking compliance of the works with the design of the works should remain with the employer which may then be delegated to members of the engineering consultant team, giving instructions, including variation or change orders, determining any applications for extensions of time by the contractor, authorizing interim payments to the contractor, certifying the date of completion and settling the contract’s final account.
Using a Project Management Information System (PMIS) like PMWeb, the Contract Administrator (CA) can use to implement all of the processes that fall under the roles and responsibilities of the CA as well as improve the collaboration with the employer, design consultant, supervision consultant, contractors and other project entities that the CA needs to interact with. The selection of which PMWeb modules to use will depend largely on the scope of services that the Contract Administrator has with the Employer. This article details how PMWeb will be used to manage some of those processes although PMWeb can be used to manage, monitor, evaluate and report on all needed processes.
Maintaining Project Documents and Records
PMWeb document management repository will be used by the CA to ensure that an electronic version of all project records including site inspections, drawings, instructions, change orders, interim payments, claims, and progress photographs among the many other project records are uploaded and stored into their designated folder which will be aligned with the physical file folders stored in the project’s filing room. It is highly recommended the project’s documents filing structure is aligned with the format needed to be turned over to the Employer when the project is closed out. PMWeb archive module will automatically download the uploaded and stored project records in the desired document turnover format.
Site Inspections
The responsibility for checking compliance of the works with the design of the works should remain with the employer which may then be delegated to members of the engineering consultant team. PMWeb will custom form builder will be used to create the different Request for Inspection checklists that the supervision consultant will use to inspect the contractor’s work in place and verify that they are by the project’s quality requirements.
Nevertheless, the Contract Administrator (CA) is required to perform periodical inspections to enable the CA to report to the employer on the progress and quality of the work in place. PMWeb snag list module provides the perfect platform for reporting on inspection issues. The CA along with the supervision consultant and contractor record all deficiencies along with pictures of the reported deficiency, the date to be fixed, and the amount to be withheld with details. The captured information will become part of the site inspection report that the CA will issue to the Employer.
For HSE site inspection, it is recommended to have a predefined checklist of all items to be inspected and reported on. PMWeb custom form builder will be used to create the checklist which will become the basis for generating the HSE project audit checklist report.
Meetings
Meetings attended by the CA may be formal or informal and for whatever purpose, should be recorded, particularly where actions need to follow. Typically, those formal meetings will cover matters that relate to progress to date and expected completion, as well as any possible risks that might affect the completion date, health and safety issues, contract instructions, including changes requested by the employer, information and queries relating to the drawings and specification, quality of work among others.
PMWeb meeting minutes module will be used to capture the details of all those meetings. For each meeting, PMWeb allows capturing the details of all actions to be taken by the different project entities. For each action item, the CA can record the action details, assign the category and type that better define the reported action, the individual responsible for taking the action, the action due date and actual completion date, and the first project schedule activity that could impact by the reported action. In addition, all supporting documents including pictures can be attached to the reported action. All pending actions will be part of the due meeting actions report.
Project Schedule
One of the responsibilities of the Contract Administrator is to manage all extension of time (EoT) requests for the approved project’s baseline schedule. Using PMWeb custom form builder, a checklist will be created for the formal review and analysis of the baseline schedule, schedule revisions, and periodical schedule updates. This is needed to ensure the quality of the project schedule and compliance with the contract’s requirements in terms of being complete, level of detail, interfaces, and milestones among others.
In addition, the PMWeb custom form builder will be used to create a form for Extension of Time (EOT) requests. The form will also include a checklist of items that the supporting documents that the contractor should confirm were completed and are part of the extension of time submission. The form could also include other checklists that could be needed when it comes to reviewing and analyzing the extension of time requests. View and editing of those checklists will be limited to the Project Owner and his authorized agents. The data captured in the EOT form will become the basis for reporting the status of all extension of time (EoT) requests either approved, under review, or rejected.
Project Communications
The Contract Administrator needs to be involved in all project communications that could result in additional costs or an extension to the project completion date. One of those communications is the Request for Information (RFI) for which the contractor might claim that the response could result in work that is out of scope, additional cost, and/or additional time. In addition, those communications could include Site Work Instructions (SWI) that could result in additional work, cost, and time. What is important for the Contract Administrator to ensure is that there should be a formal process for all project communications that could result in additional work, cost and time. This will enable the Contract Administrator to be involved in those communications by simply being present in the assigned workflow for each of those project communications.
PMWeb default RFI module will be used to capture all issued and responded RFIs along with all supportive documents, other project records, and email communications. The form includes fields to identify if the RFI could result in work that is out of scope, additional cost, and/or additional time.
Usually, all project communications would have a workflow assigned to them to identify the individuals who will be involved in reviewing and approving the communication. For each workflow step, PMWeb allows defining the duration assigned for the reviewer, actions that are available for the reviewer, and actions if the communication is returned or needs to be resubmitted among others. In addition, the workflow allows setting conditions for involving other individuals when those conditions are met or not met. For example, for the RFI, the workflow can be configured to involve the Contract Administrator if the RFI could result in work that is out of scope, additional cost, and/or additional time.
For Site Work Instruction (SWI), PMWeb custom form builder will be used to create this form. Similar to the RFI module, all supportive documents, records, and emails will be either attached or linked to the form. A workflow will be assigned to the SWI to involve the Contact Administrator in the review and approval of issued SWIs. The data captured in the SWI, RFI, and other project communications can be reported in the desired form and format.
Cost Breakdown Structure and Project Budget and Budget Adjustments
PMWeb cost breakdown structure will be created using the Royal Institution of Chartered Surveyors (RICS) International Construction Measurement Standards (ICMS) breakdown structure. This will enable progressively elaborate the baseline budget using the budget request module to formally capture all transfers, additions, and omissions. The cost breakdown structure will be the basis for reporting the overall project cost status using the PMWeb cost worksheet module.
Interim Valuations of the Works
For each contract, PMWeb allows capturing the interim valuations using the progress invoice module. The percent complete for each line can be based on the actual quantities approved for each item, the percent complete of the relevant project schedule activity, or just added based on the assessment. The progress allows setting the retention among for work on place and material stored on site. Adjustments for advance payment recovery, VAT, and other taxes can be also incorporated in the progress invoice.
In addition, PMWeb miscellaneous invoice module will be used to capture other actual costs incurred on the project that is not part of a specific contract. Both progress invoices and miscellaneous invoices allow attaching all supportive documents to the form as well as assigning a workflow for submitting, reviewing and approving the transaction.
Contract Variations
PMWeb comes ready with two forms that relate to the management of contract variations. The first is the potential change order module and the second is the change order module. The potential change order (PCO) module can be used by the project entities to provide an early warning of a chance event that could have an impact on the project’s cost and schedule. Similar to the other PMWeb modules, all supportive documents, records, and emails will be either attached or linked to the form. A workflow will be assigned to the PCO to involve the Contact Administrator in the review and approval of submitted PCOs. Approved PCOs would become the basis to issue a Change Order.
The Change Order (CO) module will be used to capture all changes to each contract scope of work. Usually, a change order will have an impact on the project cost and/or schedule. Approved change orders will become part of the interim valuations. Similar to the other PMWeb modules, all supportive documents, records, and emails will be either attached or linked to the form. A workflow will be assigned to the CO to involve the Contact Administrator in the review and approval of submitted change orders.
Cost Worksheet
PMWeb cost worksheet module will enable the Contract Administrator to visualize the latest financial transactions for all contracts’ cost-related processes. Those would include in addition to interim valuations, miscellaneous invoices, potential change orders and change orders, the processes for budget, budget adjustments, commitment contracts, and actual payments made against approved interim payments.
The user can apply a period filter to limit the displayed cost data for the selected period or span of periods. When clicking on any of the cells displayed in the cost worksheet, the detail of the transaction source record will appear. The cost worksheet could be grouped by one or more of the desired cost breakdown structure (CBS) levels for which the subtotal for each group will be calculated automatically.
Of course, the different cost worksheet layouts that were created earlier can be selected and viewed to provide different perspectives on the same project’s financial status. If the multi-currency option was enabled in PMWeb, the user can also select the currency to be used in displaying the cost worksheet values.
Substantial Completion The
The PMWeb form builder will be used to create the substantial completion form where the form will include a predefined checklist to verify that all conditions for issuing the substantial completion letter had been Fulfilled and a letter template that will generate the substantial completion letter.
The form header will include details of the project and company that the substantial letter will be issued along with the agreed substantial completion date. The form header will also include details on the review and approval workflow status. The form can also include additional fields for letter reference numbers among others. In addition, the form will include a table of all items that need to be fulfilled before issuing the substantial completion letter. For each item in the form, there will be a description of the item, action status, attachments needed, and the status of those attachments.
The attachment tab will be used to attach and link all documents and records listed in the substantial completion checklist. Those documents will be stored in the PMWeb document management repository while links to PMWeb records will be linked to the actual records created in PMWeb.
PMWeb Word module allows the creation of all letter templates needed during the project life cycle stages including the Substantial Completion Letter. The project owner’s authorized representative assigned to issue the Substantial Completion Letter will automatically have the letter generated when selecting the letter template name.
A similar approach will be followed to all other similar contract administration communications including but not limited to letters of intent, letters of award, and letters of acceptance among others. The objective is to have an input form that captures the needed information for each process, a checklist to verify that the letter can be issued and the output form for the letter that will be designed by the contract management plan.
Formal Communication of Contract Administration Processes
For all PMWeb processes including those for contract administration, PMWeb allows designing the output form for each process by each project formal communication requirement set in the project management or contract management plan. Those forms can be printed so they can be wet-signed and stamped or saved as PDF files so they can be digitally signed if permitted. The same would also apply to reports that will include a register of all transactions for each contract administration process.
Reporting Contracts Performance to Employer
The data captured in the different contract administration processes will become the basis for reporting the project performance to the Employer. The Contract Administrator can decide on the information to be communicated and the format to present this information. For example, a cost dashboard can be created to summarize the overall project cost status for which the Employer can drill through for additional details if needed. For example, the dashboard could provide a summary of the total value of change orders for which detail of all change orders will become available when the Employer clicks on the total value of change orders. The dashboard needs to be designed to provide the Employer with the needed information with ease.
About the Author
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, 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), an Earned Value Professional (EVP) from the American Association of Cost Engineers (AACE), and a Green Project Management (GPM).
Bassam holds a Master’s in Engineering Administration (Construction Management) with Faculty Commendation, from George Washington University, Washington, D.C., USA, Bachelor in Civil Engineering – from Kuwait University, Kuwait, and has attended many executive management programs at Harvard Business School, Boston, USA, and London Business School, London, UK.