project administration

What is project administration?

Put simply, project administration is arranging, organising, communicating with all parties to the contract orally in person or on the phone, correspondence, faxing and e-mailing. It is not directing and certainly not supervision namely supervising the contractor or its employees or subcontractors in how the works shall be executed.

The licensed contractor is regarded by the courts, the Office of Fair Trading and insurance companies and the like, to be a professional at its work and management. It is often perceived by contractors place in the hierarchy standing that they come in under consultants even for normal construction work, which of course is not correct unless the consultant also possesses a licensed builder qualification.

Project management and construction management come closer to directing contractors at certain periods in how the works will be executed. Contract administration is far less expensive to engage than the previous two management positions. It also does not make payments direct to the contractor nor does it form part of the building contract agreement with the client to produce the required construction work.

The Process

1. Documentation
2. Tender the works
3. Consultants
4. Client/owner
5. Periodic inspections
6. Dispute handling
7. Progress payments
8. Certifying during & completion
9. Local Council approval
10. Final payment assessment
11. Retention sum / Defects liability period
12. Signing off

The initial procedure

An agreement is struck with the client and the consultants with respect to a service fee agreement to provide project administration consultancy.

Documentation

Assumed that the specifications, architectural and engineering drawings, building agreement contract have been finalised. If this hasn't than our consultancy can include arranging for these documents suitably prepared for the required works. Namely, the consultant will generate an appropriate comprehensive specification that will include where necessary certain Australian Standards requirements, Building Code of Australia and product materials. Further, architectural and or engineering drawings as found necessary or for the purpose of the known new construction or rectifications and predicted not fully known rectifications.

Tender the works

Select experienced reliable contractors that may require meetings at the property once they have been issued with the documentation. Evaluate the submissions and make a recommendation report to client checking their insurance and Home Owners Warranty if it is a residential property including performing a licence and reference check if the preferred contractor details were issued by the client. Arrange for contract signing and deposits for parties.

Consultants

Arrange a meeting with the contractor and their project manager, foreman and “ walk the parties through the required work” at the property prior to the contract commencing. Resolve any discrepancies or unknowns where possible so as to be confident the works are performed without serious hickups and on time.

Client/owner

Subject to the type of work being performed especially if it is major internal works, the owner and/or occupier will be required to vacate although this would have been decided prior to signing the building contract.

Periodic inspections

Subject to the terms of our consultants’ service fee agreement to produce the consultancy in the form of project administration, our consultant will provide periodic inspections, will alert both parties to the building contract that there are critical stages that our consultant needs to be kept informed of; allowing us to be at the work location prior to progressing that would camouflage the work required to be inspected.

Of course, if the contractor purposely covers required inspection period works, than our consultants will have the contractor at its own expense remove the works to enable the required inspection to be carried out and certify it has been performed satisfactory. Where a contractor performing the works is found by our consultants to be irresponsible, providing sloppy work, is not supervising its employees or subcontractors, not supplying proper sound materials or equipment, is purposely delaying the duration period of the works and/or continuous in breach of the contract terms and conditions, after warnings, our consultant will inform both the contract parties that may result in the contract being rescinded subject to legal advice arranged by the client.

Dispute handling

Our consultants resolve issues that always occurs in the progress of construction and rectification works. Examples could be that the consultant is not accepting the contractor’s works, tradespeople producing poor quality workmanship, unnecessarily delays due to poor management or properly arranging delivery of material, wet weather delays being over exaggerated, claiming variations to the works that are not agreed to, or client is not making payment or payment on time in accordance with the contract resulting in the contractor delaying the progress.

Progress payments

Another activity of the project administrator is the processing of progress claims and at completion.

Certifying during & completion

Provide reports and certification at different stages and of course at completion, that the contractor has produced the work in accordance with the contract that should include the appropriate Australian Standards, Building Code of Australia and industry practice. Where works do not comply, the contractor is issued with a report and copy to the client that requests the works to be demolished and ready constructed. These works are then re-inspected and certified if found satisfactory.

At satisfactory completion, a report will be issued to both parties otherwise final payment will be withheld until the contract is completed satisfactory. Our consultants will obtain the insurance and warranties of certain specialists contractors and from suppliers and manufacturers of products particularly those of waterproofing membranes and protective coatings.

Local Council approval

Building Diagnosis Centre if required under the consulting service fee agreement to arrange for local authorities if and where necessary, if it is not part of the contractor’s agreement. Meet Council at the inspection and issue a application for occupation certificate. Arrange for any deposits to be refunded from Council to client and/or contractor.

Final payment assessment

Evaluate the contractor's progress payments, variations to the works which are usually additional costs, liquidated damages which relate to payments deducted from the contract should the duration of the contract exceed an amount agreed to in the contract. Assess any deletions or omissions of the works and deal with any outstanding disputes including insurance certificates, warranties and guarantees in the names of the client. Assess the retention sum as mentioned in the contract and the date for its payment to establish the final contract payment the client must pay to the contractor.

Retention sum / Defects liability period

The contractor’s defects liability period is also managed by the consultant always of course subject to the consultants’ service fee agreement with the client. The period is usually 13 weeks but could be up to 26 weeks where at that period the consultant inspects the property with the client and the contractor and issues a report of any matters that have developed that require adjustments, repairs or replacements for the contractor to rectify should it be proven it formed part of the contract. Once these outstanding matters are settled, the agreed retention sum is then paid by the client to the contractor and the contract is satisfactorily closed.

Signing off

The consultant issues a certification certificate to the client and contractor explaining the project, issues that have been dealt with and that the contract works and any variations have been satisfactory completed in accordance with the contract, and no outstanding matters exist. The certificate should mention the, warranty and guarantee periods and insurance of the works as a whole. Extended periods of guarantees exist on certain products and specialist services, namely waterproof membranes and protective coatings, sacrificial products (anodes) purposely located or buried within spalling concrete repaired structural elements). The client should note these in a register that will alert the client or owners to have the property inspected prior to the duration periods.

            (C) Copyright Building Diagnosis Centre 2008, All rights reserved.