We have selected the following contract administration tools from our consultant files on an international design/build project. These tools were designed to automate and simplify administrative procedures required by the contract, as these administrative details are typically the first items to be set aside when project pace is harried and technical work takes center stage. These tools were also designed to emphasize delegation of many administrative and management duties for increased compliance.

Project Particulars

A Caribbean electrical utility projected explosive growth that would be difficult and expensive to achieve using traditional bids for each of five expansions expected over the next 10 years. A 10 year procurement commitment developed, based on a strategic alliance agreement.

A 10 year strategic alliance agreement was drafted that outlines “how” the parties are to behave in this relationship. The common objectives of achieving increased productivity, improved efficiency, reduced costs and mitigation of risks were identified to create a win-win environment through the use of principled negotiations avoiding traditional adversarial roles of customer-supplier.

Next came the construction contract, which utilizes a unique ADR approach, balanced risk and safety considerations and innovative performance guarantees on technical and non-technical obligations.

As is common on design/build projects, Phase 1 of this project was completed in 16 months, one month ahead of the scheduled completion date.

The Tools

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These tools are utilized during the performance phase of the project and are intended to reduce a two-inch thick contract into several informational summaries and worksheets that contain administrative duties and answers to contractual questions. These summaries are intended to provide, or cite to, contract clauses for answers to procedural questions. These tools also serve as reminders to perform certain duties that get overlooked.

Index of Contract Documents

The Strategic Alliance Agreement (“SAA”) and Contract were outlined to provide an Index of Section Headings (index of headings.pdf) for easy reference to specific contract provisions. Definitions of non-technical terms (terms.pdf) were also copied from the contract for in-house use as a communications aid for project personnel who did not participate in contract negotiations or had not read the contract.

Some of the questions for which these tools provide answers include:

• If we need to replace key personnel are we required to notify (or get permission) prior to substitution?



• What is the process for getting a change order or schedule extension?



• What other notices must be filed to protect contract rights?



• What is the dispute resolution process under this contract and what is controlling law?

Documents Required under the Contract

The SAA and Contract call for several documents such as a letter of acceptance, a listing of key personnel, a letter of guaranty, performance bond, professional liability policies, licenses and permits, confidentiality agreements and safety and QA/QC programs.

These documents were listed in separate worksheets (contract.pdf) to ensure that the documents required by each are provided, are as specified and are kept up to date. These worksheets include sections that allow “at a glance” information on each document regarding document status- who provides the document, when received, who holds the original/copy, and document specific information such as amounts of professional liability policies. The tools also include a citation to the section(s) of the SAA or Contract that discuss the document.

Simple use of these tools require that the documents are catalogued as they arrive, that expiration or follow-up dates are calendared and the contract or SAA is referred to for clarification of any document specific questions that arise.

Duties of Project Partners

In our experience, project personnel tend to remember how they are supposed to be treated, rather than how they are supposed to act. In order to keep duties, as well as rights, in the minds of project personnel during the performance phase of the project, a summary of the duties of each major participant owner (owner.pdf), contractor (contractor.pdf) and consulting engineer (engineer.pdf) were drafted.

Under this particular contract, the parties agreed to negotiate in good faith, regularly review and suggest improvements to project coordination and communication programs. The summary sheets contain a reminder of the approach as well as specific duties - the owner will provide staff for expedited decision making, the owner will procure generating units, etc.

This same technique can, and should, also be used to create tools for contracts between the contractor and their subcontractors. These tools are intended for use by the entire project team, who likely have not read the contract. Consider including in the kickoff meeting a buy-in section where the reasons behind contract language, duties and clauses are described to all team members.

Standard documents

Administrative details are dealt with by noting documents and deadlines required by the contract. Standard cover letters, meeting agenda (agenda.pdf) and other documents were drafted to allow consistent compliance with the requirements of this complex contract.

Under this contract, senior management were required to meet every six months to develop and maintain the relationship and trust necessary for project success. The contract requires that this meeting include certain agenda items, which were incorporated into a template agenda, which also serves as an outline for reporting of the meeting minutes. At the top of this sample agenda we included quotations from the SAA that reinforce the spirit and benefits of this “shared interests” agreement.

Other documents were also standardized, such as cover letters for deliverables, for decisions requiring approval and other documentation required by risk management and other good business practices. Shared templates of current contact information for all project parties is a communications must.

Benefits

When project work gets harried, a concentration of attention on project work to the detriment of administrative details is a common occurrence. Creating a system for administrative checks and balances will not only streamline project manager duties, creation of a system allows dissemination of information to your project team and creates a factual information reference. Project team members, management and departments -accounting, human resources, legal and marketing- can also benefit from access to question-specific contract information.

Time savings through organizing this data prior to project performance can be significant. Use of a project assistant or other administrative staff is a time saver that frees up your project managers to manage the project. The SAA and Contract took approximately twenty hours to summarize and create standard tools and worksheets. See the Municipal Contract Tools page, which took approximately eleven hours to summarize and create the requisite tools and worksheets.

CSG can perform contract specific summaries and tools for your contract. CSG also offers training and workshops to train your in-house contract staff to create similar tools.