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There is a very slight difference between the terms contract administration and construction management, though the agenda of both posts varies vastly. Though they have been used interchangeably, the fact lies that one is more involved with the building while the other is more dedicated to making sure everything is as stated in the initial owner or representative agreement. Contract Management Services includes all tasks directly related to constructing the building which entails controlling activities such as employing and assigning subcontractors and workers, keeping tally of material shipment, their costs and their utilization. In fact, it can be argued that construction management is in charge of everything to do with the physical manifestation of the building.
In contrast, the contract administration is the collective work of the Contract Management Services, the designer or architect and the owners or representatives of the owning firm to make sure the final building has overall conformance with the original contract documents. Basically, contract administration is in charge of ensuring that all activities from the performance evaluation of contractors, service providers to the monitoring of supplies is in accordance to contractual obligations and also ensure that the appropriate remedial actions are taken for any deficiencies in contractual implementation, its scope of the terms and conditions.
The contract implementation phase of any major project is infinitely important because this is where procurement requests are honored and debated. Without decreeing a contract that is both beneficial to the client as well as the suppliers and service providers, it will be difficult to meet the required quality standards and technical details. Contract administration and Contract Management Services generally include and end with a final inspection of the products or services before the end of the contract. This verification process should include ensuring the right number of products, the set technical details and quality have been achieved in each sample as per the contract and that any discrepancies to the contract are accounted for.
Contract administration begins as a selection process or bidding process for the contract which will also require interested parties to submit strategies for performance reviews, the time frame of the project, the deliverable final product and its attributes as well as negotiating contract terms. Both parties are bound by the conditions of the contract once it is signed and the contract administration takes over the project for that point onwards. Though specific criteria for subcontractors and suppliers are sometimes given as part of the contract, the contract administration is generally given free rein to select a qualified team of suppliers and subcontractors within the contract’s feasibility.
If there are no specific details as to the required service providers, it falls upon the contract administration team to select their own and hence will have to take primary responsibility for the risk if the provider does not deliver goods or services according to the terms and conditions. Furthermore, it will fall upon the contract administration to instigate remedial actions if the constraints of the contract are not implemented within the framed timeline.
Since the responsibility of procurement and employment of services and goods solely rests on them, the contract administration also involves knowing how to manage risks. One of the most basic purposes of hiring a contract administration to oversee a project is to monitor the overall and individual performance of each division of the venture. This ensures each step of the plan is within the framed objectives of the contract. This includes completing each phase on time, within budget and also aims in detecting any deficiencies or inconsistencies in the schedule and finding a solution, which in extreme cases includes suspending or terminating the contract.
An experienced and quick-thinking contract administration team is crucial to the overall success of a project, even if it is on a small scale. For larger public-funded projects, this will make all the more different as it is at this stage that the most corruption and misuse of public funds, wastage and trafficking of material happens. While the contracting process for procurement is relatively faster than any other part of the project, it is the one which requires the most attention as the most money can be saved during this stage. The contract administration does not generally get the recognition it needs as they work behind the scene during the project; however, without a solid procurement of goods and services, the entire process could be in shambles and that is when their real value is realized.