Construction Contract Administration

What is Construction Contract Administration?

Construction Contract Administration is the work required to manage your rights and obligations under a Construction Contract after it is signed.

For Contractors, it includes managing Contract notices, Variations, EOTs, Payment Claims, claims, Security, records, Practical Completion and defects. It also includes monitoring your Principal’s obligations and responding when your contractual position changes.

Good Construction Contract Administration requires more than completing paperwork. Your Project Team needs to recognise when a Project event has contractual consequences and take the action your Contract requires.

Contract Administration from a Contractor’s perspective

Contract Administration looks different depending on which party is administering the Contract.

Your Principal may appoint a Superintendent, Principal’s Representative or Contract Administrator to perform functions under your Contract. Depending on your Contract, that person may issue directions, assess claims, value Variations or certify payment.

Your business has a different job.

Your Project Team needs to protect your rights while meeting your own obligations. That means understanding what your Contract requires when work changes, delay occurs, payment falls due or another contractual event arises.

For a Contractor, Construction Contract Administration is part of protecting your contractual and commercial position throughout your Project.

Who administers your Construction Contract?

A Contractor does not always employ someone with the title Contract Administrator.

Contract Administration responsibilities may be shared between your Project Manager, Contract Administrator, Contract Manager and Commercial Manager. Your Project structure will usually determine who performs each task.

The job title matters less than the allocation of responsibility.

Someone needs to know who is responsible for notices. Someone needs to manage Variations and EOTs. Payment Claims need an owner. Your Project Team also needs a clear process for escalating issues that require senior commercial input or legal advice.

Problems arise when everyone assumes someone else is dealing with your Contract.

Your business should allocate Contract Administration responsibilities at the start of your Project and review them when your Project Team changes.

Your Contract needs to work inside your Project

Your Project Team does not administer your Contract in isolation from Project delivery.

Directions are given. Drawings change. Access is delayed. Design information arrives late. Scope questions arise. Subcontractors identify additional work. Your Principal asks your Project Team to proceed before price or time has been agreed.

Each event starts as a Project issue. Your Project Team then needs to work out whether the event also triggers a Contract requirement.

That may require a notice, Variation claim, EOT claim, updated Program, cost record or other contractual response. This is where the Contract Administrator comes in. Construction Contract Administration connects those day-to-day Project events with the rights and obligations in your Contract.

Set up your signed Contract before Project delivery starts

Your Project Team should identify the Contract information it will need before Project delivery gets busy.

Start with your complete executed Contract. Confirm the Contract Documents and identify your key roles, authority, dates, notice requirements and time bars.

Blaze Business & Legal has prepared a free Construction Contract Administration Setup Checklist to help Contractors work through this initial setup.

Get your Free Construction Contract Administration Setup Checklist

One Project event can trigger several Contract requirements

A common Contract Administration mistake is treating Variations, EOTs, payment and claims as separate events.

Consider a revised drawing that changes your Scope.

Your Project Team first needs to work out whether the person issuing the drawing has authority to direct changed work. Your Contract may require a Variation notice before your business proceeds.

The changed work may affect your Program. That can trigger separate delay and EOT requirements. Your business may incur additional labour, plant, materials or Subcontractor costs. Your Project Team needs records that support those costs and connect them to the changed work.

Your Payment Claim may later include the Variation. Your Contract may prescribe how the Variation is valued or what supporting information must accompany your claim.

One revised drawing can therefore affect Scope, Variations, delay, EOTs, records and payment. Experienced Construction Contract Administration identifies those connections while your Project is still moving.

Notices and time bars need to be managed when events occur

A valid entitlement can still be difficult to recover if your business misses a contractual notice requirement.

Construction Contracts commonly impose notice requirements for delay, EOTs, Variations, latent conditions, discrepancies, access problems and other claims.

Your Contract may prescribe who receives the notice, how it must be delivered and what information it must contain. It may also impose a time bar. Your Project Team needs to recognise the event before it can give the required notice.

That is why Contract Administration cannot be left until someone starts preparing a claim. By then, an earlier notice deadline may already have passed.

Your Project Team should know the main notice triggers and escalation process before those events arise.

Variation administration starts when the work changes

A Variation does not always arrive as a formal document headed “Variation”.

Changed work can start with a revised drawing, site instruction, RFI response, design development or request made during a Project meeting.

Your Project Team needs to recognise when the work being requested may fall outside your existing Scope.

The next question is who has authority to direct the change. A request from someone working for your Principal does not automatically mean that person can direct a Variation under your Contract.

Your Project Team then needs to follow your Contract procedure. That may involve giving notice, submitting a quotation, identifying time effects and keeping supporting records.

Waiting until your Payment Claim to deal with the Variation can leave your business trying to reconstruct what happened weeks or months earlier.

Construction Contract Administration should deal with changed work when the change occurs.

EOT administration starts with the cause of delay

An EOT claim is not simply a request for more time at the end of a delay.

Your Project Team first needs to identify what caused the delay and whether that cause gives your business an entitlement under your Contract.

The next step may be an initial delay notice. Your Contract may then require an EOT claim within a separate timeframe.

Your Project Team also needs evidence of the delay and its effect on your Program. A delay event does not automatically establish the number of days claimed.

Delay costs need separate consideration. An entitlement to additional time does not automatically give your business an entitlement to additional money.

Your Contract wording determines the steps your Project Team needs to take when delay occurs.

Payment Claims depend on more than the amount claimed

Payment administration starts before your Project Team submits a Payment Claim. Your Contract may set claim dates, valuation rules, supporting document requirements and other preconditions. It may also deal with retention, set-off, tax invoices and the timing of payment.

Variations and other claims can also affect the amount your business seeks to recover.

Your Project Team should reconcile those items as your Project progresses rather than waiting until final account.

Applicable Security of Payment legislation creates a separate statutory framework. Your contractual and statutory payment rights need to be considered together where relevant. Construction Contract Administration should support the flow of accurate information from your Project records into your Payment Claims.

Project records need to prove what happened

Project records are not useful simply because your business has a large document management system.

The records need to prove the facts relevant to your contractual position.

For a Variation, your business may need to prove who directed the work, when the direction was given, what changed and what additional cost resulted.

For an EOT, your records may need to establish when the delay started, its cause and its effect on your Program.

For another claim, your business may need to prove when it became aware of an event and when notice was given.

Useful records can include correspondence, site diaries, photographs, Programs, meeting minutes, labour records, plant records, delivery dockets and cost information.

Your Project Team should know which records it needs while the relevant work or event is occurring.

Contract Administration needs to follow the signed Contract

Project Teams often work across Contracts that look familiar. An AS 4000 Contract on one Project may operate differently from an AS 4000 Contract on another Project because the Special Conditions have been amended and the Statement of Requirements is drafted differently. The same applies to AS 2124, AS 4300 and other standard form contracts.

A Principal’s bespoke (purpose-drafted) Contract will use different procedures again.

Your Contract Administrator should therefore work from your complete executed Contract rather than relying on how a similar Contract worked on another Project.

Check your General Conditions, Special Conditions, schedules, Scope and other incorporated Contract Documents together. Your signed Contract determines the Contract Administration process for your Project.

Authority needs to be clear throughout your Project

Your Project Team needs to know who can exercise contractual authority.

That question becomes particularly important when someone directs changed work.

Your Contract may nominate a Superintendent, Principal’s Representative or another authorised person. It may also allow powers to be delegated.

A Project meeting can include several people from your Principal’s team. Their involvement in your Project does not necessarily give each person authority under your Contract.

Your own authority also needs to be clear.

Your Project Team should know who can issue notices, agree commercial positions, approve Variation pricing and make decisions that bind your business.

Clear authority helps your business avoid acting on directions that do not have the contractual status your Project Team assumed.

Contract Administration needs commercial judgement

A Project Team can comply with a process and still miss the commercial issue. Contract Administration often requires decisions about what to pursue, when to escalate and how to protect your position without unnecessarily disrupting your Project.

A minor issue may require a simple notice and good records. A significant Scope change may affect price, Program, resources and Subcontractors. Your Project Team may need commercial input before committing your business to a course of action. A disputed direction may require legal advice before your business decides whether to proceed, object or reserve its rights.

The Contract Administrator needs to recognise when an issue has moved beyond routine administration. That commercial judgement is an important part of Contractor-side Construction Contract Administration.

Practical Completion needs to be planned before the end

Practical Completion can affect payment, Liquidated Damages, Security and the start of your Defects Liability Period.

Your Contract determines what your business must achieve.

Physical completion of the Works may not be enough. Your Contract may also require testing, commissioning, approvals, certificates, manuals, as-built drawings, warranties or other handover documents.

Those requirements can take time to prepare.

Your Project Team should identify them early rather than discovering them when your business is ready to seek Practical Completion.

Contract Administration should keep the contractual requirements for Practical Completion visible as your Project approaches completion.

Contract Administration continues through defects and close-out

Practical Completion is not the end of your Contract Administration work. Your Project Team may still need to manage defects, outstanding Variations, unresolved claims, final Payment Claims, Security and final account requirements.

Your Contract may also contain an Evergreen Defects Liability Period. Rectifying particular defective work can start a new Defects Liability Period for that work.

Security may reduce at Practical Completion and remain partly held until a later contractual milestone.

Close-out becomes harder when your Project Team has demobilised and the people who know your Project have moved elsewhere. Your business needs to identify outstanding contractual items and responsibility for them before your Project Team disperses – this is the role of the Contract Administrator.

When Contract Administration needs legal advice

Your Project Manager or Contract Administrator should not need a Construction Lawyer for every Contract Administration task. Routine notices, registers, records and claims can form part of normal Project delivery.

Legal advice becomes more relevant when your Project Team needs to understand what your Contract means or determine your legal position.

That can arise when:

• your Contract provisions conflict or are unclear
• your Principal disputes a Variation entitlement
• your business receives a direction with uncertain contractual status
• an EOT or other claim is rejected
• your Principal threatens recourse to Security
• your business needs to preserve its position before a dispute develops
• design responsibility is disputed
• your Project Team needs advice on a significant contractual claim.

The purpose of early legal advice is to help your business understand its position while there are still practical decisions to make on your Project.

Construction Contract Administration services for Contractors

Blaze Business & Legal provides Construction Contract Administration services and support to Contractors and Subcontractors.

The scope can be tailored to your Project and your internal capability.

Our support can include Contract Administration setup, Contract advice, notices, Variations, EOTs, claims, payment issues, Security, Practical Completion and close-out.

Blaze Business & Legal can also work with your Project Team when an issue needs both legal and commercial input. This Contractor-side focus is different from acting as your Principal’s Superintendent or certifying claims on your Principal’s behalf.

Blaze Business & Legal provides front-end Construction Law and commercial support for your contractual position.

Contract Administration training and setup assistance

A Contractor does not always need to outsource its Contract Administration function.

Your Project Team may instead need better systems, clearer responsibilities and practical training.

Blaze Business & Legal can provide Contract Administration training together with setup assistance for your Project.

Training can use your Contract and the procedures your Project Team will need during delivery. This makes the training relevant to the work your team is carrying out.

The scope can address notices, Variations, EOTs, Payment Claims, claims, records, Security, Practical Completion and escalation.

The aim is to help your Project Team administer your Contract more effectively during delivery.

Rachelle Hare – In my experience

When I worked full-time as a Commercial Manager, I needed important Contract information available throughout the Project.

I did not want to search through a 300-page Contract every time someone asked when an EOT notice was due or who could direct a Variation.

I kept the important Contract information at hand, with the relevant Contract reference beside it.

That never replaced reading the Contract. When an issue arose, I went back to the relevant provisions and checked them in full.

I still use that approach when advising Contractors on Construction Contracts today.

Rachelle Hare has more than 25 years of experience in the Construction Industry and related industries around Australia. Her background includes 25+ years as a Construction Lawyer, Contract Management and six years working full-time as a Commercial Manager on major ICT and Construction Projects.

FAQs about Construction Contract Administration

What is Construction Contract Administration?

Construction Contract Administration is the work required to manage your rights and obligations under your signed Construction Contract. For Contractors, it commonly includes notices, Variations, EOTs, Payment Claims, claims, Contract records, Security, Practical Completion and defects throughout Project delivery.

What does a Construction Contract Administrator do?

A Contractor’s Contract Administrator helps your Project Team administer your Construction Contract during delivery. The role can include preparing notices, managing Variations and EOTs, maintaining Contract records, supporting Payment Claims, monitoring deadlines and helping your Project Team follow your Contract procedures.

Who is responsible for Contract Administration on a Construction Project?

Responsibility depends on your business and Project structure. Your Contract Administrator, Project Manager, Contract Manager or Commercial Manager may perform Contract Administration tasks. Your business should allocate each responsibility clearly and identify when your Project Team needs senior commercial or legal input.

What is the difference between Contract Administration and Contract Management?

Contract Administration focuses on administering your Contract requirements during Project delivery. Contract Management can extend further into commercial strategy, Contract performance, procurement and broader management of contractual relationships. The terminology can overlap between construction businesses and Projects.

When should Contract Administration start?

Contract Administration should start when your Contract is signed and your Project Team begins preparing for delivery. Your initial work should identify your Contract Documents, roles, authority, important dates, notice requirements, time bars and the procedures your Project Team will need during your Project.

Can a Project Manager administer a Construction Contract?

A Project Manager can perform Contract Administration tasks where those responsibilities form part of their role and they understand your Contract requirements. Your business should still clearly allocate responsibilities and identify which issues require commercial or legal escalation.

Does Contract Administration include Variations and EOTs?

Contract Administration commonly includes managing Variation and EOT procedures under your Contract. Your Project Team needs to identify the relevant entitlement, notice requirements, time bars, supporting records and claim requirements when the underlying Project event occurs.

Does Contract Administration include Payment Claims?

Contract Administration can include preparing and managing contractual Payment Claims. Your Project Team should understand your claim dates, valuation provisions, supporting document requirements and payment procedures. Applicable Security of Payment legislation also needs separate consideration.

When should a Contract Administrator involve a Construction Lawyer?

A Contract Administrator should consider legal advice when your Project Team needs help interpreting your Contract or assessing your legal position. Examples include disputed Variations, rejected EOTs, unclear directions, Security issues, disputed design responsibility and significant contractual claims.

Does Blaze Business & Legal provide Construction Contract Administration services?

Blaze Business & Legal provides Contractor-side Construction Contract Administration support, legal advice, setup assistance and training. Services can be scoped around your Project, your Contract and the capability of your existing Project Team.

Get Construction Contract Administration support

Need help with Contract Administration on your Project? Have an issue concerning the Contract Administration on your Project?

Blaze Business & Legal works with Contractors and Subcontractors on Contract Administration, Contract advice, Variations, EOTs, claims, payment issues and Project Team training.

Call Rachelle Hare on (07) 3063 3373 or request a fixed-price quote for an agreed scope of Legal Services.