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There are several tasks that the appointed Engineer or the Architect have to perform while administering contracts for a project. The first task that needs to take place is the calling of tenders. Tender is an offer to carry out work at a fixed price; this offer with details about the work is first advertisedon different platforms to invite interested tenderers. The tenderers are required to go through pre-tender briefing and site visits and once they are satisfied they may send sealed tenders to client or his/her representative. For the selection of a successful tender, the sealed tenders are then opened upon expiry of closing time in the presence of a witness. The tender bids are then analyzed and the client sorts any clarification needed. The Engineer takes client’s concerns into account while suggesting a tender and chooses the one which he thinks appeals to the client’s demands and standards of how and when the work should be completed. On acceptance of a tender by client, all the tenderers are noticed about the selection and contracts and the selected tenderer is required to sign a contract with the client in the presence of a witness. This contract contains all the details and documents required to take out the project. The general conditions of the contract remain the same for each task in construction industry so that Principles and Contractors are at all times aware of their general rights and obligations. The contractor (the tenderer) discusses about the work with the appointed engineer and nominates a starting date of the work. The Engineer regularly inspects project and irregularities are conveyed to the contractor for correction to be done within a reasonable time. At intervals, the contractor submits a report of the progress of the project, which is crosschecked by the Engineer’s team before approval of any further payments after which certificate for payment of approved amount is issued for furtherance of the project. It is the duty of Engineer to provide any information or help sorted by the Contractor and make any modifications to the designs and resolve site problems when necessary and it is the duty of Contractor to find adequate means and methods which would help him in completion of the project. Once, a thorough inspection of completed project is done, Certificate of Practical Completion is issued by the Engineer and the contractor is paid for the work excluding retention sum and liquidation damages, if any. Liquidation damages are damages are payable if the project is not completed within the timeline specified in the contract. The contractor corrects any further defect after which retention amount is paid and contract is closed out or discharged.
Each project has its own uniqueness, which needs to be understood by different units involved in a project. Contract administration links the units to bring forththeir optimum efficiency for a successful completion of a contract. Administration of contract aims at ensuring that the terms of contracts are met while achieving the desired output (Devidson and Sebastian, 2009). Enforcement of contracts is done by addressing the irregularities in performance on time (Puil and Weele, 2014) and managing any challenge that comes along the way. Achievement of inter-functional co-ordination is facilitated best by contract Management. Process like signing of contract, meetings, reviews and completing of work within stipulated deadlines(Kaufmann and Hedderich, 2004) necessitate inter-functional co-ordination and build trust between principal and agent (Mutua et al., 2014) and creates an obligation towards each other (Krappe and Kallayil, 2003). The built-up trust between the parties facilitates completing of project, the increase in trust increases the efficiency of the parties involved (Dirks and Fernin, 2001) and protect their financial interests. Contract performance and contract administration are kept in moderation by inter-functional coordination. Agreement performance is preceded by inter-practical coordination and is a key strategic dimension of performance (Axelsson et al., 2005) For the optimization of efficiency units in a project, inter- functional coordination is required by Contract management units(Mentzer et al.,2004). The process of procurement , negotiation, investigation, evaluation of contract performance is done by an appointed person known as contract managers. There is a strong relationship between contract management, trust and inter- functional coordination and any weak link may cause huge monetary losses.
Davidson, B., and Sebastian, R.J. (2009), “The relationship between contract administration problems and contract type,” Journal of Public Procurement, Vol 9 No 2 pp. 262-286.
Dirks, K.T. and Ferrin, D.L. (2001), “The role of trust in organisational settings”, Organisation Science, Vol. 12 pp.450-467
Kaufmann, L. and Hedderich, F. (2004). A novel framework for international sourcing applied to the emerging Chinese supply market. In Essig, M. (Eds.), Perspektiven des Supply Managements – Konzepte und Anwendungen. Berlin, Germany: Springer, pp. 123-150.
Krappe, K. and Kallayil, G. (2003), “Contract management is more out of control than you think” Journal of Contract Management, Vol. 3 No. 8
Mentzer, J.T., Min, S., Bobbitt, L.M. (2004), “Toward a unified theory of logistics”, International Journal of Physical Distribution and Logistics Management, Vol. 34, No. 8, pp.606-627.
Mutua, J.M., Waiganjo, E., Oteyo, I.N. (2014), “The influence of contract management performance of outsourced projects in medium manufacturing enterprises in Nairobi county, Kenya”, International Journal of Business and Social Science, Vol. 9 No.1
Puil, J. and Weele, A.V. (2014), International Contracting: Contract Management in Complex Construction Projects, Imperial College Press, London.
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