23-02-2024
Is your construction contract being administered properly?
What to consider when selecting a Contract Administrator/Employer’s Agent.
When embarking on a construction project, the role of a Contract Administrator/ Employer’s Agent cannot be overlooked. From the beginning to the end, these professionals are responsible for ensuring construction contracts are executed smoothly, disputes are avoided or resolved efficiently and projects are kept on track.
The standard forms of building or civil engineering contracts set out critical actions that the Contract Administrator /Employer’s Agent has to execute and get right.
We are starting to see a growing trend in proceedings against Contract Administrators/Employer’s Agents. It is no surprise given the multitude of tasks and responsibilities, so before entering into an agreement, it is imperative for Building Employers to carry out due diligence when selecting a Contract Administrator/Employer’s Agent. This includes solvency, conflicts of interest and ensuring they carry adequate professional indemnity (PI) insurance.
Here are some key tasks performed by Contract Administrators/Employer’s Agents, that must be done properly and the potential consequences if not executed correctly:
- Inviting and processing tenders: Inadequate tender processes can lead to extra costs, delays, or disputes with contractors.
- Preparing contract documents: Poorly drafted construction contracts and documents can result in ambiguities, leading to misunderstandings, extra works, delays and disputes.
- Administrating contract terms, notices, consultants, and procedures: Failure to adhere to contractual terms and procedures can result in extra costs, delays and disputes.
- Certifying interim payments: Over or under certification can lead to disputes and legal cases.
- Issuing instructions such as contract variations or directions: Miscommunications or delays in issuing instructions can lead to extra costs, delays and disputes.
- Chairing meetings and issuing progress reports: Ineffective communication and reporting can hinder the project coordination and make claims difficult to defend leading to extra costs and disputes.
- Assessing claims such as extension of time and loss and expense: Inaccurate assessment of claims may lead to legal proceedings and where assessment has been made on extensions of time, this is irreversible.
- Managing site inspections and defect rectification procedures: Neglecting site inspections or defect rectification can compromise the quality of the project and result in disputes and extra costs in damages.
- Issuing certificates of practical completion and later the certificate of making good defects: Issuing incorrect certificates may lead to disputes extra costs and release of retention money when it should not be released.
- Agreeing the final account and issuing the final certificate: Disagreements over the final account will lead to extra costs and disputes.
In conclusion, the role of a construction Contract Administrator/Employer’s Agent is a difficult one and they must be professional, competent and diligent. It is a pivotal role in safeguarding the project success. With a skilled and competent Contract Administrator/Employer’s Agent, the fragile and difficult challenges of delivering a building project is key to avoid extra costs, delays and disputes.
If you need help with procuring a building or advice on appointing a Contract Administrator/Employer’s Agent – call us today.
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