Developing Tools to Streamline the Process of Contract Administration

Abstract

Contract is the basic legal arrangement between the parties to spell out mechanism of discharge of obligations related to any transaction. In case of construction, parties entered into a contract whereby contractor offers to execute a job on certain terms and conditions. These terms and conditions after being negotiated form the basic structure of exchange of promises. It is this contract administration which guides the actions of the parties and decide the obligations and hence the liabilities. Construction industry being the second largest sector of the economic pie of our country needs to be given attention both ways: technically as well as legally. With the growing advancement in technology, projects of larger size can be undertaken for the progress in development of a country at a faster rate. But projects of large scale bring larger complications which result in non completion of the project within its stipulated time and cost. To simplify these complications in a project, there is a need of developing proper correspondences at the right point of time. This study deals with managing the hindrances causing disputes and deciding the liability of the concerned parties by developing proper correspondences, documentation and having proper record keeping. To gain information of the industry as to what are the major reasons of disputes and percentage of projects where litigation occurred, a questionnaire survey was prepared which was circulated among the industry which included Owners, Contractors and Consultants viz. parties to a contract. In addition, it is thought useful to study some cases of success and failures of projects, so that we can supplement our process of analyzing and finalizing our conclusions about contract administration. The questionnaire and case studies helped in evaluating the hindrances that occur in pre-construction, construction and post construction phases. An attempt shall be made to prepare guidelines as well as include a checklist of activities wherein correspondence is required to act as evidence which will help in administering the contract during the various stages of a project. An attempt has been made on emphasizing the need of proper documentation and record keeping. It is through discussion, questionnaires and case study that we can have adequate information material to conclude and devise some checklist for guidance of contract administration. It is also observed that though the correspondences are done by the parties, the contents of the correspondences are misleading and mis-conceptual, also leading for disputes and hence it is an intent to prepare templates of various letters for important events like extra item, change order, extension of time, levy of L.D, etc. In short, the paper aims at streamlining the process of contract administration with a view to help both the parties to understand their liabilities and consequences arising out of.