Managing Contractor Contracts

Managing Contractor Contracts: Scoping and Management of the Project

A Managing Contractor Contract is a type of construction contract where the owner (client) engages a contractor to manage and oversee the entire construction project. This includes not only the construction work itself but also the coordination and management of design, planning, subcontracting, and other aspects of the project. The managing contractor acts as a single point of responsibility for the delivery of the project.

Want to learn more about Construction Contracts generally? Read our Ultimate Guide to Construction Contracts in Australia

Key Features

Here are some key features of a Managing Contractor Contract:

  1. Single Point of Responsibility: The managing contractor is responsible for the overall management of the project, including hiring and managing subcontractors, overseeing design and construction, and ensuring that the project is completed on time and within budget.
  2. Flexibility: Managing Contractor Contracts are often used for complex projects where the scope of work may change or evolve over time. The managing contractor is expected to be flexible and adaptable in managing these changes.
  3. Cost Management: The managing contractor is usually responsible for managing the budget of the project. They may be reimbursed for actual costs and paid a management fee, or they may work under a Guaranteed Maximum Price (GMP) arrangement.
  4. Risk Management: The managing contractor assumes a significant amount of risk, as they are responsible for delivering the project to the owner’s specifications. They must manage risks such as delays, cost overruns, and quality issues.
  5. Collaboration and Communication: The managing contractor acts as the main point of communication between the owner and the various parties involved in the project. They are expected to facilitate collaboration and ensure that information flows smoothly between all stakeholders.
  6. Quality Control: Ensuring the quality of workmanship and materials is a key responsibility of the managing contractor. They must implement quality control processes and ensure that the finished project meets the required standards.

When are Managing Contractor Contracts used?

Managing Contractor Contracts are often used for large or complex projects where the owner wants to outsource the management of the project to an experienced contractor. This can include government projects, commercial developments, and large-scale infrastructure projects.

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