Contract Administration is your breadcrumb trail to profitability
For a small business, it’s all too easy to fall behind with contract administration. You’re busy on-site, you’ve new work to factor in and the record-keeping can be a real headache.
But sorting it out at the end of the contract is not the route to profitability – and it will tie up your project team, potentially for months, when you need them to be moving on to the next project.
You need to be both proactive and pragmatic. Good contract administration will safeguard your position, manage risks and help you to build good working relationships with your clients.
Some businesses have expressed concern that using the terms of the contract can come across as being adversarial. But the contract is there to guide all parties to use good collaborative management, demonstrate compliance with obligations and control changes or additional work.
Protect your business’s bottom line
Investing in a Quantity Surveyor at the start of the project will increase efficiency and protect your bottom line. Your QS will ensure you prioritise contract administration before the project gets underway and integrate proper procedural management throughout the project.
What is Contract Administration?
In simple terms, contract administration is the process of ensuring every party has met the obligations of the contract.
It involves managing both pre and post-contractual processes to deliver obligations, minimise risks, ensure compliance and build strong, collaborative and effective working relationships throughout the supply chain.
Five top tips for effective Contract Administration
- Be comprehensive
- Be clear & concise
- Be communicative
- Be prompt
- Be pragmatic
The Covid-19 pandemic may have made it impossible to meet face-to-face, but it’s vital not to shy away from meetings. Now lockdown restrictions have eased, it really is worth getting back to socially distanced meetings as they are vital for building all-important relationships.
They also make it easier to take a pragmatic approach – you can sit down and seek instructions for work, ensure vital production information including drawings and specifications are communicated, and agree valuations for additional work, whilst reducing the time spent going back and forth with cost variations.
You may feel satisfied you have email trails confirming the agreed cost of all the inevitable extras that come up during the life span of the project – but it can be difficult and time consuming to formally mop up the loose ends at the end of the project.
Failures in contract administration also significantly increase the risk of costly, stressful and time-consuming disputes.
It really is a false economy to underestimate the importance of contract administration – it is your breadcrumb audit trail to profitability.
Talk to ProQS and find out how our services can help you to ensure compliance with agreed objectives and maintain the flow of information between contractors, sub-contractors, suppliers and the project team.
We will advise on identifying and managing risks and contractual changes, helping to avoid disputes and resolving any that do arise in a timely manner, and we’ll help you keep on top of valuing additional work.
Our aim is to ensure a smooth-running and successful project for you and your client – potentially leading to additional work in the future.
Get in touch to discuss your Contract Administration needs on 01206 654003
or call us today on 01206 654003