SLQS-Journal Vol. 1 - Slqs-uae.org

SLQS JOURNALJanuary 2009Can a Project be Successful without ProperContract Administration?Prof. Indrawansa Samaratunga PhD, DSc, FRICS, FAIQS, FIQS(SL), FCIArb, FCIOB, FCMI, FIAS, FBEng,(Arbitrator & Expert registered with Dubai InternationalArbitration Centre/Chartered QS/Chartered Manager/Chartered Builder)Australian Institute of Quantity Surveyors – Middle East RepresentativeTimely completion, defects-free facility and value for moneyare the key expectations of a developer when he embarks ona development. On the other hand, the Contractor aims atconstructing and completing the facility within his budget,with optimum utilization of his resources and by securing hisrights in order to generate his anticipated reward.It is the duty of the Contract Administrators of each of thesetwo parties to ensure that these expectations are realized efficiently.In order to achieve this, the Contact Administratorsshould be fully conversant with the obligations, rights andliabilities of the parties to the contracts that they are administrating.The multi disciplinary function of Contract Administration ina construction project is carried out by Quantity Surveyors,Engineers, Project Managers and Commercial Executives. Itis essential that they are capable of not only identifying theobligations, rights and liabilities of the parties under the contractsand in law, but also advising on how to discharge thoseobligations and secure those rights in a timely and propermanner, in order to protect the interests of their companiesthus protecting them from exposure to liabilities.A Contract Administrator who is ignorant of the fact thathis company would lose its entitlement either in full or inpart, if he does not serve a notice in a timely and propermanner (where such notice is a condition precedent to theright) would not be capable of protecting the interests of hiscompany. Since contracts are not stand alone documents andsince they are to be read with many legal provisions applicablethereto, it is not an easy task for a person to identify the obligations,rights and liabilities of the parties intended thereby.In order to overcome this difficulty to some extent, the studyprogrammes of Contract Administrators (especially those ofQuantity Surveyors) include the subject of Contract Law.The root cause of many an inflated claim, is the inability ofthe Contract Administrator to identify the entitlement of theparty or its limits. Similarly the unjust denial of a claim ismostly due to the ignorance of the entitlement of the otherparty. Both these failures of the Contract Administrators oftenresult in disputes, which are quite abundant in the Constructionindustry.Even the most praised top quality project, unique or otherwise,cannot be considered a success if it left one or morestakeholders dissatisfied. During the construction or followingcompletion, if the parties are at arbitration, the ContractAdministrators have failed in their duties.Construction Methodology, quality control mechanism, measurementtechniques and valuation procedures are all essentialto the project but Contract Administration becomes ofprime importance for a project to be successful.Even the most praised top quality project,unique or otherwise, cannot be considereda success if it left one or more stakeholdersdissatisfied. During the construction orfollowing completion, if the parties are atarbitration, the Contract Administratorshave failed in their duties.Many incorrect practices exist in the administration of contractsand if they are to be rectified, all Contract Administratorsneed to be made aware of such incorrect practicesand educated on what the correct practice should be. To thisextent, those who employ Contract Administrators shouldencourage them to undertake further studies and CPD (ContinuousProfessional Development) as to the best practicetechniques of Contract Administration. Additionally, Universityand Polytechnic study programmes for Contract Administrators(Quantity Surveyors, Engineers, Architects etc.)should expand their curricula to provide a complete educationon how to identify the obligations, rights and liabilities of theparties under Construction Contracts, not only in the theoreticalaspects but also in their applications.24