The aim of contract administration is to fairly apply the terms and conditions of the signed contract. This requires a mix of essential personal skills including intelligence, organisation, technical appreciation, process and decision-making. If the role is done properly it brings certainty to all parties involved which provides the benefit of reliable forecasting of outcome. If no one is sure what the decision will be or how they will be treated they withdraw from the process and uncertainty inevitably follows.
Here are the top ten things to ensure great contract administration:
- They set up a simple system for capturing risks and issues and review it at every meeting. A simple log that is shared by all with dates, owners, forecast of impact and key actions or mitigation measures.
- They record all facts and records as they go in a way that cannot be disputed later. Drop lines on programmes are verified, detailed photographic evidence, robust minutes of all meetings and clarifying any points of ambiguity that all parties confirm as correct.
- They agree the impact of all changes before implementation and record that on a clear contract instruction. Pre-agreement of the time, cost or specification impact before saying yes is essential. Sometimes you may have to compromise with a forecast impact but don’t let that be the norm and then finalise as soon as you are able. The final account of out-turn cost should always be accurate with a high percentage of certainty.
- They meet the team weekly with a structured agenda and minutes to maintain progress and then monthly for a formal report. Project decisions are made on an hourly basis. You cannot hope to visit a project once a month and get all that you need. Weekly effective meetings keep your finger on the pulse of the project delivery and allow you to help in a meaningful way at the right time.
- Ensure that everybody gets paid what they are due and when they are due. Contract payments are absolute and not like general invoicing. Make the process slick and fool proof.
- They are not scared of a difficult issue and face it head on and in an impartial manner. There will always be disagreements, misunderstandings and misinterpretations but they are not personal. Therefore it is best to get the issues on the table and deal with them and the way you do this will actually build trust and a strong team ethos for future testing times that might follow.
- They know the contract processes and follow them (and get others to do the same). You must know your contract and follow it. It would be like going on a hike and not being able to use a compass or map read. Doing this fairly and properly sets the tone for the project.
- They actively seek opportunities that will make project delivery easier for any party. If you can find a way that makes it easier for one of the contracting parties then share it. They will be grateful and you help the project. It shows that you are all on the same side in terms of the objectives whilst not compromising the commercial or contractual positions that we must hold.
- They capture lessons learnt and advise their colleagues to help other projects. Your list of variations is your colleagues list of lessons learnt that will help them avoid repeating the same mistakes.
- They create a working environment for all parties to perform. This can be health and safety, certainty of behaviours, knowing that decisions will get made or just by being consistent.
A great contract administration service brings a steady discipline to the project that is infectious. The result being that everyone ups their game and sees the benefit of doing things as you go. Next week is the final wrap up in this short series about contract delivery.