Relationships and Contract Administration

 

As an engineer who has been involved with over a hundred construction contracts, I facilitate projects by promoting and maintaining harmonious relationships between the three principal parties. It hasn’t always worked, I’m afraid. Once antagonism sets in, it can kill a project.

In the customary way of administering a construction contract, each of the three parties has a well defined role. The owner is usually somewhat more distantly involved, with the engineer acting as the owner’s representative. Day-to-day contact occurs between the contractor and engineer, and they must work harmoniously for the job to best proceed.

If we could only rigorously follow the General Conditions of the Construction Contract, most problems would be preempted and disputes would be minimized and resolved without rancor. One example is the issue of progress payments. So often we come to the first monthly progress payment without approving the supporting documents or establishing the procedures for payment. Late progress payments can kill relationships. Meeting these simple conditions by following the General Conditions of the Construction Contract means faster payments to the contractor and, thus, better relationships.

The precise definition of responsibilities is another way that the General Conditions of the Construction Contract builds better relationships on the job site. The list of contractor’s responsibilities in the General Conditions of the Construction Contract is long and clearly defined and includes (but is not limited to) the following:

• Provide adequate and experienced job site superintendence,
• Minimize requests for substitute materials and equipment,
• Maintain control of subcontractors and suppliers,
• Keep notes for record documents up to date,
• Consistently enforce site safety rules,
• Anticipate coming tasks and seek clarification before time becomes an issue, and
• Develop knowledge of the complete contract documents, including the specifications, with the intent to resolve any discrepancies before the work is performed, not after.

If the contractor tackles these responsibilities proactively, the relationships on the job will be enhanced.

The engineer’s roles as design professional and owner’s representative are also defined and are considerably limited by the General Conditions of the Construction Contract. These responsibilities include observing the work, authorizing minor variations, rejecting defective work, processing contractor submittals and pay applications, interpreting contract documents, making initial determinations on any dispute that arises, and handling change order requests. The General Conditions of the Construction Contract also obliges the engineer to expedite the contractor’s work and to notify the contractor of any eligibility for extra compensation.

The professional relationships between the contractor, engineer, and owner can be good relationships if the contract documents are followed during contract administration and if all three parties proactively approach their assigned duties. Following the General Conditions of the Construction Contract will build enduring relationships, as well as enduring buildings.