Contract Administration Services
- What is Contract Administration?
Implementing proper contract administration with a professional contract administrator is a step towards starting a development on the right foot.
In simple terms, contract administration is the safety net that ensures:
- What the client wants is clearly communicated to the contractor, through an industry standard agreement that is legally binding
- What is required by the client is documented and referenced
- The development costs are clearly itemised, and omissions declared
- The method of payment is agreed
- The correct insurances are checked and in place to protect all risks and interests
- A mechanism is in place to ensure that additional costs are reviewed and agreed prior to being charged
- A process is in place to vet your chosen contractor
- A process is in place to ensure that all statutory requirements are being addressed, and certified where required
- A clear timeline is in place for all agreed works
- A process is in place to address conflict and dispute resolution
- A process is in place to address defects
- A process is in place to confirm completion of the agreement
Without addressing these items as a minimum, you are leaving yourself exposed to conflict with the contractor, which can result in time being lost on site over delays in payments, disputes over invoicing and agreed works, failure to achieve statutory compliance, or even entering into a development with the wrong type of contractor.
- The role of a contract administrator
The contract administrator will stand between the client and contractor on all contractual and legal matters relating to the agreement made between client and contractor. A contract administrator is impartial and experienced in dealing with conflict and disputes within construction.
You may have already chosen a contractor, or are seeking to use a recommended builder. Once you have made a decision, you now need to formalise a clear, comprehensive, fair and robust agreement?
- Can I just sign the agreement prepared by the builder/contractor?
The quick answer to this is NO.
This could be a YES if the contract is if an industry standard, but a contracts administrator would be required to manage the contract agreement, and the administrator should not be either involved party under the agreement.
You may be tempted to use whatever the contractor has issued you, be convinced that this is ‘okay’ because they ‘do this with all customers’, and think that you are saving money but not engaging in contract management services however think again. A legal agreement that is not ‘industry standard’, drafted by the person or company that you are promising to pay large sums of money to may not be presenting fair and clear terms to all involved parties.
Failure to implement a fair and robust contract could potentially lead to delays, overspends, failure to achieve compliance with statutory requirements and confusion on the agreed works.
Many contractors will have a bespoke contract or an ‘off-the-shelf’ contract that they may seek to use to formalise an agreement for construction services. If a contractor offers a contract to you, we have often found this is because it is most likely to be a contact that they are comfortable with using…..and this in turn could become an issue if they are seeking to manipulate an agreement mid-way through construction.
It may be worth reminding you that a friendly contractor is not your friend, and what can be depended on is what is agreed upon under a proper contract.
Our view is that a bespoke contract offered by a builder/contractor is a contract that they will be familiar with, including its pitfalls and loopholes. Before signing any contract, we strongly recommend having this reviewed or replaced with an industry standard contract format, with a contract administrator in place.
We still hear of developments being done on a handshake, such developments rarely end well.
This is where the role of a professional contract administrator can be of great benefit.
- So who can be a contract administrator
We will start off by making our recommendations on who should not be a contract administrator:
- Not the client
- Not the contractor
- Not any party or person that is working on behalf of the contractor
The contract administrator should be an independent person or company that has no financial interest in the development, and can be impartial to all parties.
- Contract administrator services provided by MSK Design
At MSK Design, we review all developments individually in order to ensure project specific requirements are addressed, and offer contract administration services to all of our clients.
We also administer contracts for professional developers and consultants that require an independent contract administrator to manage an agreement for a development.
We have experience in administering JCT format contracts for contract values between £80,000.00 to £5m, involving residential extensions, new build housing and blocks of flats, for residential homeowners and professional developers.
Our role and experience as contract administrator has seen many different scenarios, managing complex developments and diffusing conflict and disputes. If you would like to know more about how contract administration services can benefit your development, contact us and speak to a senior member of the team.