Guide to Contact Administration - Acre Design
 

Guide to Contact Administration

Introduction

This document is a brief guide to what a Contract Administrator does and how they can help you with your building project. Appointing a Contract Administrator achieves two main benefits:

  1. Provides someone to help liaise between the client and contractor.
  2. Ensures that the contract procedures are being followed.

Whether you need a contract administrator will come down to several factors including:

  • Your own capability and resource to administer the contract yourself
  • Type of contract,
  • Contract requirements,
  • Whether there is a specific need for an independent party.

We will consider the above and other related matters in this guide.

Acre Design typically use the RIBA Domestic Building Contract for our projects and this guide is focused on the procedures and terms found in this contract.

Many contractors will have their own bespoke or standard contract which does not include a contract administrator role.

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Why do I need a building contract?

Once the building design is complete and the necessary permissions obtained, it’s tempting to think that the contractor can simply be given the drawings and get on with it. However, it is essential to have a written contract between you and your contractor before work starts, otherwise you both will be at risk. Without a construction contract, there won’t be a written formal agreement for essential details of the project, such as what is included, the price, the payment schedule, start and completion dates, and insurance.

A building contract describes the procedures for undertaking the project, and what happens if things go wrong. The building contract also defines in writing which drawings and documents are part of the project so there is no confusion.

What does a contract administrator do?

Contract administration is the management of the contract between the client and the contractor. This ensures contractual procedures are followed and site progress is recorded. Although the contract administrator duties may vary from one building contract to the next, the role typically consists of the following tasks:

  1. Record keeping – maintaining notes of site visits, office files and site photographs.
  2. Site visits – regularly visiting the site to review progress and monitor quality while keeping a record of the visit and observations.
  3. Meetings – chairing and minuting meetings on a regular and consistent basis.
  4. Reporting – providing regular status reports covering items including quality, time, cost, risks, health, safety and environmental matters. A record of the estimated final adjusted contract sum should also be included in the reports.
  5. Instructions – taking the employers instructions and completing and issuing the necessary paperwork required under the building contract.
  6. Time – monitoring progress and ensuring completion is achieved in accordance with the building contract.
  7. Interim valuations – preparing valuations and issuing the required payment notices necessary under the building contract.
  8. Contract instruction/variations – managing any variations and issuing the necessary instructions required under the building contract.
  9. Contract completion date, extension of time, partial possession, and practical completion – following the contract procedures in respect of timings and handover requirements as well as the issuing of notices and certifications required under the building contract.
  10. Loss and expenses – reviewing any loss and expense claims in relation to deferred possession or other matters such as an extension of time award,
  11. Adjusted contract sum/final account – keeping an accurate and up-to-date record of the final estimated adjusted contract sum during the project, and preparing and agreeing the final account following practical completion.
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Is a contract administrator required?

The role of contract administrator is used many standard forms of respected building contract, such as in the RIBA Domestic Building Contract, and the JCT Minor Works, Intermediate and Standard building contracts.

There’s no law that requires a project to have a contract administrator. However, if you use a contract which contains this role (such as the RIBA Domestic Building Contract) then someone must be appointed as contract administrator for the contract to function.

Can I, the client, be the contract administrator?

In principle there is nothing to prevent the client and contractor from agreeing that the client will perform the role of contract administrator. However, this is highly unusual and fraught with difficulty as this can potentially cause a conflict of interest when needing to exercise professional skill in a fair and unbiased manner.

A further consideration before undertaking the role of contract administrator, employer’s agent or project manager under the intended building contract is whether they are adequately insured.

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Why is there a need for an independent party to act as contract administrator?

There are many reasons why a client would employ contract administrator for their building project. For example, the employer may have a good relationship with the building contractor and would prefer not to put this at risk by putting them in the position of making difficult decisions on payments, certification etc. Or perhaps the client may not have yet established a suitable relationship with the building contractor, they may not have the time or experience to administer a building contract, or perhaps they simply value the skills and expertise of an independent party.

How do I appoint a contract administrator?

If you are not sure of your exact requirements, or some of the technical aspects of appointing a contract administrator are not clear, Acre can run through with you what services you are likely to need.

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Glossary of Common Terms

CDM Regulations: Health and safety legislation for Construction, the Construction (Design and Management) Regulations 2015.

Contract Administrator: The person or organisation responsible for administrating the contract, e.g. architect, project manager. They are not a party to the contract but will be stated in the contract.

Contract Drawings: The drawings which describe the works to be completed as part of the construction contract.

Construction Contract: A binding agreement between two parties to deliver specified goods and services, for the construction of a building project.

Contractor: A person/company who agrees to supply materials, works or services in accordance with a contract, such as vendor, supplier, manufacturer, fabricator, construction contractor or subcontractor, etc.

Health and Safety Executive (HSE): Government body responsible for health and safety regulation in Great Britain.

Lump Sum Contract: A contract with a single lump sum price for all of the works, and the contractor is responsible for completing the project within the agreed fixed cost set forth in the contract. Also known as a Fixed Price Contract.

Main Contractor: A Main Contractor is responsible for the completion of the project under the contract terms and conditions. The Main Contractor can utilise and manage subcontractors or hire people for specific parts of the work to complete the project.

Parties: A person or organization involved in the signing of the contract. Normally comprise of a supplier and a client with shared rights and responsibilities.

Schedule of Work: A written list of the works to be carried out under the contract.
Subcontractor (Subbie): A Subcontractor is a company or individual being contracted by a main contractor to help deliver the project. See ‘Contractor’.

Supplier: A person or organization responsible for supplying goods.

Tender Stage: The stage of a project after construction information is complete and before the construction contract is signed. Includes Pre-Tender services and the Tender Process.

Works: Materials & services provided by the contractor to complete the project. Often simply called The Works.

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