JOURNAL OF INFORMATION, KNOWLEDGE AND RESEARCH IN

CIVIL ENGINEERING

NEED OF CONTRACT ADMINISTRATION IN

CONSTRUCTION PROJECTS
1
SHAIVAL V PATEL, 2MR. ASHOK PATEL, 3MR. B M MARVADI
1
Student,M.E.,Dept. Of Civil Engineering, L.D.R.P. Institute of Technology and
Research, Gandhinagar-382015, Gujarat.
2
Assistant Professor,L.D.R.P. Institute Of Technology and Research, Gandhinagar-
382015, Gujarat.
3
Assistant Professor,L.D.R.P. Institute Of Technology and Research, Gandhinagar-
382015, Gujarat.

[email protected]
ABSTRACT: The luck of all projects is closely relates to the right prepared contract. Contracting is an integral
part of construction projects. Managing the contracts therefore is equally important for the success of any
business process due to rapid increase in multiple contracts. Contract and partnerships are an essential part of
today’s high speed, multilateral business culture both in the public and private sector. Contract administration
is becoming an integral part of project management, and business in general. Many commercial and project
managers are more and more facing contract administrative issues. Contract administration is the active
management of the relationship between the client and the contractor over the term of the contract for the
provision of goods and services to the agreed standards. Contract administration should be proportionate to the
value, risk and complexity of the contract.
Successful contract administrative organisations can increase control, increase effectiveness and reduce cost
and also provide strategic and competitive advantages. Good preparation, the right contract, single business
focus and service delivery management and contract administration factors essential factors for good contract
management. There are several reasons why organisations fail to manage contract successfully, the chief
reason for project delays is poor contract administration, therefore need of proper contract administration is
essential.

1. INTRODUCTION:
Contract: An agreement enforceable by law is contract
Administration: The act of managing duties, responsibilities, or rules is administration.
“Contract Administration” is a process of carrying out construction work in a planned manner on behalf of the
appointee. Construction work include detailed planning, feasibility study etc. from the every stage of project.
The objective of Contract Administration is developing better relationship between owner and contractor by
reducing conflicts/arbitration.
Construction projects in India are worth crore of rupees per year. It is the most competitive and risky business.
The money involved in this sector is from public fund, so it becomes very important to see that such projects get
successful to avoid any type of blockage of funds. In addition it is equally important to complete the project in
time to avoid obsolescence loss of the product. In almost all construction projects, there is a contract between
owner and contractor for desired product after successful completion of the construction project. Each
construction contract is unique and need unique understanding and interpretation as per the contractual
requirements. Each contract carries a set of obligations to be performed by the parties involved in the contract,
so there is a need of contract administration.
In current time, the projects are becoming giant in size and more complex due to technological development,
joint ventures and foreign collaboration, specified needs, time constraints, special infrastructural requirements
and parallel involvement of various agencies in project. Today construction industry is operating under high
level of competition and profitability became the prime concern for all the contracting organizations. The real
strength of successful contracting parties lies in cooperation of the owner and contractor as partners of the same
team with common goal laying more stress on their mutual trust and understanding, their positions are rarely
equal and contracts are left open to multiple interpretations. Hence, study of Contract Administration is
necessary tool for completion of project.It is said that efficient & effective contract administration will reduce
the cost of project by 10%. This study involves emphasizing the need of contract administrator for Smooth
execution of contract.

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 JOURNAL OF INFORMATION, KNOWLEDGE AND RESEARCH IN
CIVIL ENGINEERING
2. OBJECTIVES:

To study the need and functions of contract administration.

To find out the importance of need of contract administration.

To ranking the need of contract administration.

To arrive at some conclusion regarding importance of effective contract administration.
3. SCOPE OF WORK:

Study includes public sector and government sector construction contract from Gujarat state region of
the country. For medium to large size projects over project cost 10 crore.

To fulfill the objectives to do a trend survey for need of contract administration. Review of respondents
has been taken through questionnaire survey and personnel interview.

The respondents for to take a survey are clients, consultants and contractors. The respondents were
selected to fulfill the following requirements:
• Person is engaged in all phases of work of the project
• Size of organization medium to large
• Ease of data (Response of the person)

4. RESEARCH METHODOLOGY:
These study data were collected using tools of personal interview and questionnaire was prepared
taking concept from the research review. A questionnaire includes all main need of contract administration in
construction project fir successful completion of project. A questionnaire was developed to assess the
perceptions of different parties, clients, consultants, contractors involved in the construction projects for to
evaluate the need of contract administration in construction projects.
4.1. QUESTIONNAIRE FOR SURVEY:
1. Developing proper and accurate bid and contract documents with detail specifications.
2. Conduct a Pre-bid conference to present client’s requirements and pre qualification criteria for selection of
contractor and any queries and suggestions.
3. To participation in Bid Evaluation Process.
4. Conduct a kick-off meeting with the contractor and agencies after the contract has been awarded and a
work order has been issued.
5. Interference in selection of the subcontractor proposed for the project according to the work they will
perform.
6. Manage labour laws and its complains and monitor welfare facilities on site.
7. Ensure that there is a proper system used for review, testing and inspection before acceptance of goods,
works or service delivered.
8. To co-ordinate and ensure that clients, contractors and consultants are working as per committed time.
9. To develop an excel sheets and timely submit required reports for transparency of the process, with properly
filled documents.
10.Payment Clause: Value engineering be got done for all major proposals for advance payments and Ensure
that all deliverables are inspected or checked that they are complained with terms and conditions of contract.
11.To develop effective Channel of communication between client, contractors and consultants for better
contract performance.
12. To manage and administer Variation in orders that modifies the original contract.
13. To identify Potential Risks associated with the project and develop action plans to mitigate those potential
risks by providing timely information and alerts.
14. Price Escalation: Analyze issues or situations carefully and in a timely manner. In genuine case, mediation
between client and contractor to avoid disputes and delays
15. Time Extension: Prepare legal paper work requesting for time extension to complete contract to the
authorities in favour of contractor or consultant in case of genuine causes.
16. Notices: Contract Administration is needed for proper and satisfactory reply of each legal notice for all the
agencies.
17. Claim Settlement: Smooth administration and resolution of disputes and implementation as necessary.
18. To administrate Discharge of Contract after maintenance period get over.
4.2. STUDY AREA:
The study area includes public and private contract over 10 crore of Gujarat state only.
4.3. RESPONDENTS:
Total 102 respondents are selected for to take review from their in which:
• Clients-48
• Consultants-21
• Contractors-33

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 JOURNAL OF INFORMATION, KNOWLEDGE AND RESEARCH IN
CIVIL ENGINEERING
contract administration based on importance of the respective need. The
The respondents are rating the need of contract
weightage of rating:
1: Not Important
2: Less Important
3: Important
4: Very Important
5. ANALYSIS OR DATA INTERPRETATION (RII ANALYSIS):
The data received from the questionnaire survey will analyze by Relative Importance Index (RII) method to
determine the relative importance of major need of contract administration in construction projects.
The RII formula is given below:
RII = Sum of weights (W1 + W2 + W3 +……+ Wn) / A x N
Where, W = weights
ights given to each factor by the respondents and will ranges from 1 to 4
(‘1’ is less significant and ‘4’ is extremely significant)
A = highest weight (i.e. 4 in this case)
N = total number of respondents
The investigation results for need of contcontract
ract administration in Indian construction contracts shows that the
ranking of need of contract administration with the highest degree of importance. It will help to almost mitigate
most of the problem which leads to the delays and disputes.
3.1. SURVEY RESULTS SULTS AND ANALYSIS:
Table 1: Response from respondents and Ranking
Que 4 3 2 1 RII Rank Que 4 3 2 1 RII Rank
1 78 22 2 0 0.9363 1 10 45 51 6 0 0.84
0.8407 11
2 55 44 3 0 0.8775 3 11 42 48 12 0 0.8
0.8317 13
3 50 43 9 0 0.8505 10 12 46 45 11 0 0.8
0.8374 12
4 49 36 17 0 0.8272
0.82 15 13 47 38 15 2 0.8186 16
5 30 40 17 15 0.7083 18 14 59 37 6 0 0.8799 2
6 39 57 6 0 0.8309 14 15 52 45 5 0 0.8652 7
7 61 32 9 0 0.8775 4 16 46 52 4 0 0.8529 9
8 55 44 3 0 0.8575 8 17 54 44 2 2 0.8676 6
9 30 42 24 6 0.7455
455 17 18 58 37 7 0 0.8750 5

5.1. RANK OF NEED OF CONTRACT ADMINISTRATION IN CONSTRUCTION PROJECT

PROJECT:

• Developing proper and accurate bid and contract documents with detail
Rank- specifications
1
• Conduct a Pre-bid
bid conference to present client’s requirements and pre
Rank- qualification criteria for selection of contractor and any queries and
suggestions
3

Rank- • To participation in Bid Evaluation Process

10
• Conduct a kick-off
off meeting with the contractor and agencies after the
Rank- contract has been awarded and a work order has been issued
15

Figure 5.1:
.1: Rank of Need of Contract Administration
Administrat in Pre-construction Activities

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CIVIL ENGINEERING
5.2. RANK OF NEED OF CONTRACT ADMINISTRATION IN DURING AND POST
CONSTRUCTION ACTIVITIES:

•Price Escalation: Analyze issues or situations carefully and in a timely manner. In

Rank genuine case, mediation between client and contractor to avoid disputes and delays
5. 2
•Ensure that there is a proper system used for review, testing and inspection and make
Rank decision on execution of work related to contractual terms and conditions
4
•To administrate Discharge of Contract after maintenance period get over
Rank
5
•Claim Settlement:
Settlement Smooth administration and resolution of disputes and
Rank implementation as necessary
6
•Time Extension: Prepare legal paper work requesting for time extension to the
Rank authorities in favor of contractor or consultant in case of genuine causes
7
•To co-ordinate and ensure that clients, contractors and consultants are working as per
Rank committed time
8
•Notices: Contract Administration is needed for proper and satisfactory reply of each legal
Rank notice for all the agencies
9
•Payment Clause: Value engineering be got done and ensure that all deliverables are
Rank inspected and checked as per terms and conditions of contract
11
•To manage and administer Variation in orders that modify the original contract
Rank
12
•To develop effective Channel of communication between client, contractors and
Rank consultants for better contract performance
13
•Manage labour laws and its complains and monitor welfare facilities on site
Rank
14
•To identify Potential Risks associated with the project and develop action plans to
Rank mitigate those potential risks by providing timely information and alerts
16
•To develop an excel sheets and timely submit required reports for transparency of the
Rank process, with properly filled documents
17
•Interference in selection of the subcontractor proposed for the project according to the
Rank work they will perform
18

.2: Rank of Need of Contract Administration in During and Post Construction Activities
Figure 5.2:

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CIVIL ENGINEERING
6. CONCLUSION:

• The investigated results for to find out the need of contract administration in construction project.
• The study results analyze by the relative important index theory and it will give the importance of need
of contract administration to higher degree of importance (RII=97%) to lower degree of importance (RII=70%).
• The investigated results clear that efficient and effective contract administration is needed for
successful completion of projects

• In this study all main need of contract administration either it is pre-construction, during construction
and post construction activities are find. Also find out the rank of its importance in contract administration for
successful completion of project

REFERENCES:

1. Dr. Vandana Bhatt, “Contract Administration”, AICTE, June 1998.

2. Mr. Swapnil Khandar, “Role of Contract Management in Construction Industry” .

3. Arjun Patel, “ Role of Contract Administrator in Construction Projects”.

4. J T Nashikkar,“Contract Management”.

5. Ketki S. Kamble, A. R. Kambekar , “Analysis of Factors Contributing Delays and Claims in

Construction Projects”.

6. Gregory A. Garrett, “contract management”, july 2007

7. Alemayehu Dawit, “Research Methodology”, p.g.53, August-2014.

8. https://en.wikipedia.org/wiki/Contract_management#Phases_of_Contract_Management

9. http://www.designingbuildings.co.uk/wiki/Contract_administrator_for_construction_contracts

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