CM101: Mastering Post-Award Contract Management Bootcamp

This is the first section that we will start discussing the core topics in the foundation of contract management discipline. The following will be covered in this section:

• Contract Management Responsibilities Matrix

• Contract Administrator Responsibilities

• Developing Contract Administration Manual

• Establishing Strong Document Control Centre (DCC)

It is a best practice to develop and implement a Contract Management Responsibilities Matrix in a project to avoid confusion who does what. Big companies do that, why not you? You can list the main tasks and sub-tasks and can assign individuals to complete those.

A sample matrix is shared under the resources section of this lecture. It will be very helpful to build your own matrix in a very short time.

In this lecture, our discussion will be primarily on the typical titles given to those who manages the contract in an organization.

After talking about the titles, we will move on to discuss on Contractor Administrator's responsibilities related to contract management in detail. The whole course is structured in a way to cover all the responsibilities mentioned under this lecture.

Contract Administrator's Typical Responsibilities In a Project document is shared under the resources section of this lecture.

Manuals are the key reference documents of companies which help the employees in performing their duties by referring to that.

Companies which are very serious in standardization of their processes invest in developing various manuals and want their employees to implement them from day one.

Contract Management is a kind of discipline which can be performed better when there is a guiding manual. Any effort to build a Contract Administration Manual is therefore very valuable as it would save a lot of time with the provided information and would eliminate the risks of incompliances.

This lecture is dedicated to development of a Contract Administration Manual of your own by using the outline provided in the resources section of the lecture.

Document Control Centre (DCC) plays an important role in properly managing a contract both internally and externally.

Let's have a look how to establish a strong DCC which will support a proper contract management in this lecture.

This is the section where we will talk about the key principles while starting administering a contract. Our focus will be on:

• Reading the Full Contract and its Attachments

• Contract Baseline

• Identify Order of Precedence

• Contract Filing

• Contract Risk Assessment

• Identifying Actions, Notices, Liabilities, Flow-downs

• Training the Team

In this lecture, we will discuss the best way of reading a contract. But before that, we should make it clear what a contract package is. After giving some details on a typical contract package, we will focus on the main points to identify while reading the package. We will also talk about what to do following our findings.

Contract baseline is called for something else other than referring to baseline schedule. In this lecture, we will go over the elements of contract baseline which are:

• Scope of Work: Design Basis, Constraints, Standards, etc.

• Work’s Programme and Assumptions

• Price for Covered Scope: Quantities, Estimating Assumptions, Profit

• Project Execution Plan

• Other Risk Allocated Points in the Contract: Site Conditions, Laws

It is possible that there happen some deviations from the contract baseline throughout the project. There will be some examples for deviations in this lecture and we will talk about how to handle those.

A precedence clause works well if stipulated in the contract but it may be unclear what to do when you don't have such clause in your contract. In this lecture, we will discuss the common understanding and practice applied when this clause does not exist in contracts.

Contract filing is another best practice to know and apply in our projects. It is not a DCC filing but an exercise to keep important documents in a structured way for easy access later on. We will talk about the principles to follow in contract filing in this lecture.

Also, you will find a contract filing index in the resources section of the course which will be very helpful to you in developing your own index.

Like you do in the project management discipline, a risk assessment and management is also needed for contract management discipline. In this lecture, we will go over the definition of risk and refresh you on risk response strategies as referred to PMI's concepts.

You will be given typical contract risk subjects in the resources section of the lecture.

In this lecture, there will be more discussion on what actions to do regarding our findings while reading the contract in respect of notices, liabilities, and flow-downs.

In the resources section, you will find a list template to properly capture the actions, determine the associated risks, and assign those to individuals.

Team members generally have different level of commercial awareness. To align them, you may need to conduct commercial awareness trainings. In this lecture, you will find more insights on the issues to address in commercial awareness trainings like:

• Project’s stakeholders and contracting structure

• Team members’ roles and responsibilities

• Schedule and critical path

• Directions received from Employer and our contractual position

• Changes and the approval procedure

• Scope (in-scope and out of scope items), avoidance of scope creep

• Known major risks for the Project and our liabilities

• Payment terms and conditions

• Targets for profit and performance/efficiency levels

• Reporting requirements (specifically daily reports)

• Stop-work requirements

• Recovery and acceleration

In this section, I will mention the core aspects of subcontracting which are:

• Pre-Bid Activities

• Tendering

• Bid Evaluation and Award

• Notice to Proceed and Administering Subcontract

Pre-bid activities add value to the bids as significant amount of information is exchanged between the parties. In this lecture, we will discuss the main pre-bid activities which are:

• Pre-Bid Meeting

• Pre-Bid Site Visit

In the resources section of this lecture, you will find a typical agenda for pre-bid meeting and a typical checklist for site visit which will be very helpful to you.

Tendering is one of the most important processes in contract management. Generally, this is done by more senior members of the team as it requires good knowledge of tendering strategies as well as procurement routes. Tendering is the bidding process to obtain a price and how a contractor is actually appointed.

In this lecture, we will briefly mention about the tendering strategies which are:

• Single-Stage Tendering (most common)

• Two-Stage Tendering

• Negotiated Tender

After discussing on the tendering strategies, then we will go over the main procurement routes which are:

• Traditional Lump-Sum

• Traditional Re-measurement

• Design and Build (or EPC)

• Cost Reimbursable

• Construction Management

• Management Contracting

• Public Private Partnership (PPP)

Before completing the lecture, you will hear some useful thoughts on tendering based on our experience.

You will find a typical tender (RFP) package and some RICS guidance notes in the resources section of the lecture.

In this lecture, we will talk about the bid evaluation process steps after receiving the bids and award. The main steps mentioned in the lecture are:

• Bids Received

• Bids Evaluated

• Bids Negotiated

• Work Awarded

• Thank You Letters Sent to Unsuccessful Bidders

Notice to Proceed (NTP) is a very secure mechanism to start the work sometime after the subcontract signature. In some projects, subcontracting might have been done earlier than planned, that's to say, before the pre-conditions of starting the work are complete. Or you may need to get some deliverables submitted before allowing subcontractor to mobilize to the site and start the work. In such cases, it is recommended to use Notice to Proceed mechanism in subcontracts. 

In this lecture, we will cover an example clause from a contract and discuss the details of a proper NTP. You will find a Form of Notice to Proceed in the resources section of this lecture.

In this lecture, we will focus on handling correspondences. Within this context, our discussion will be about the following:

• Initiating Letters

• Answering Incoming Letters

• Handling Emails

• Contract Archiving Requirements

Before talking about the letters, we will first discuss about Point of Contract (POC) and its role and importance in projects.

In this lecture, you will learn the twenty principles of writing effective letters. Also, a letter template is provided in the resources section of this lecture. You can insert your own information and start using it quickly.

In many cases, you find yourselves answering incoming letters. In addition to the principles of initiating letters, there are some more points to be careful while answering incoming letters.

In the same lecture, we will talk about how a correspondence log should be, an example of which is also provided in the resources section of the lecture. We will complete this lecture by talking about confidentiality of letters. 

Emails are the most preferred and frequently used communication tools in our day-to-day management of projects. We write many emails in a day, as well as receive. Some of us first check the email box as the first thing in the morning. Emails are very important part of our business life. 

So, let's review what the issues are about handling emails in this lecture. We will also go over the six etiquette rules on writing effective emails.

Before completing this section, we will talk about archiving requirements in projects in this last lecture of the section.

There are a couple of points to highlight in this lecture and you will see the typical contract clauses on archiving requirements.   

Suppose that a negative risk (threat) occurred in your project and, among others, it caused a big financial impact on your budget. You could be in a position of indemnifying someone and/or spending extra money to restore the things. Yes, I am talking about the impact of occurred risks in a project and, in this section, I will mention you about the following insurances which are the best tools to lessen these types of impacts caused by risks:

• Employer Provided Insurances

• Our Own Insurances

• Subcontractor's Insurances

• Initiating Insurance Claims

Employers have certain actions regarding insurance coverages for their projects to protect themselves against the impacts of risks. And one of the most known insurances provided by Employers is Construction All Risk insurance. We will talk about some further details about this type of insurance and other relevant points like deductible limits and coverage gaps.

There is a lot to say when it comes to Contractor's own insurances. In this lecture, we will list some important factors to be careful and also explain two different basis for an insurance policy: Claims Made and Occurrence.

We will also talk about the following typical insurances required in a contract:

• Construction/Erection All Risk

• Third Party Liability

• Professional Liability

• Employer’s Liability

• Marine Cargo All Risk

Subcontractors might be doing smaller part of the works. However, this does not mean that they should do this unprotected against any loss and/or damage arising out of their actions.

In this lecture, our discuss will be about some key points related to Subcontractor's Insurances. We will also talk about the following typical types of Subcontractor insurances:

• Third Party Liability

• Professional Liability

• Employer’s Liability

There are certain steps to follow while initiating an insurance claim even though such is not defined explicitly in the contract. An insurance claims procedure would be very helpful for you. You will learn the best practices on initiating insurance claims in this lecture. By following the tactics given in the lecture, you can protect your company's rights by avoiding the pitfalls.

Bonds and Guarantees are the commonly used tools in projects that secure the business between the Parties. There are various types of bonds and guarantees, but in this section, we will focus on the widely used ones as follows:

• Bid Bonds

• Performance Bonds

• Advance Payment Bonds

• Warranty and Retention Bonds

• Parent Company Guarantees

We will also talk about Subcontractor's bonds and how to keep bonds and guarantees log. A template tracking log will be provided under the related lecture.

Some tenders are done more seriously than others. In these tenders, you will need such a tool to have the bidders comply with the bid terms until the bidding process is complete through the bid bonds. In this lecture, we will go over some points about the bid bonds.

A sample bid bond requirement clause will be shown in the lecture. Also, a form of bid bond will be provided in the resources section of the lecture.

Performance bond is the most important bond among others. It is an instrument not only between Employer and Contractor, but also between contractor and subcontractor/supplier, ensuring that the obligations undertaken by a party will be performed satisfactorily. In this lecture, we will discuss on some important points about performance bonds.

A sample performance bond requirement clause will be shown in the lecture. Also, a form of performance bond will be provided in the resources section of the lecture.

In some projects, companies may request advance payments at the beginning of the works with the reason that the money is required for mobilization and/or material supply. Or sometimes during the project execution, companies need cash support from their clients to maintain a positive cash flow. Advance payment bonds are for protecting Employer for the money given in advance to Contractor.  In this lecture, we will talk about the advance payment bonds/guarantees as a security for the advanced sums.

For any work performed under a contract, there are always some warranty obligations. Your contractual obligations continue to some extent during warranty periods. Warranty bond or retention bond provides such security for Employer during warranty period. In this lecture, we will discuss on some key points about warranty and retention Bonds.

After discussing about various types of bonds provided by financial institutions, let's have a look at the Parent Company Guarantees. When needed and for what purpose? This lecture is dedicated to discussions on parent company guarantees.

After covering the topics on the bonds and guarantees typically requested from Contractor, let's discuss on the same type of bonds which can be considered to be requested from subcontractors/suppliers. In this lecture, we will summarize the applicable principles to subcontractors by adding a few more thoughts on the previous lectures.

Before closing this section, we will cover some final points about how to track bonds and guarantees. You will be given the template bonds and guarantees log in the resources section of this lecture which is prepared in excel for your use in the projects.

While progressing in the project, new tasks appear along the way. In this section, we will explain these tasks under the below topics:

• Progress Payments

• Types of Contracts

• Meetings and Minutes

• Progress Recording and Measurement

• Daily Reports

• Photographs and Videos

• Acceptance of Works Performed

There is always an economy behind delivering a project. Contractors get paid by Employer for the works performed by them. In this lecture, we will discuss about the progress payments through which Contractor does its payment request from Employer.

Payment schedule and format, payment procedure, interest rate for late payment, back-up documents, etc. are some of the key subjects that will be covered under this lecture. We will also mention some important points about payments to subcontractors/suppliers.

In this lecture, we will explain the distinct features of main contract types which will ensure that we are not exposed to the risks associated with each type.

With respect to pricing, the following main types of contract will be discussed with their advantages and disadvantages based on several factors:

• Unit Price

• Lump-Sum

• Cost Reimbursable 

Meetings are one of the most important elements of doing business either held physical or online. In this lecture, we will go over the key points about the meetings which are:

• Pre-Bid Meetings

• Pre-Award Meetings

• Project Kick-Off Meetings

• Periodic Progress Meetings

• Coordination Meetings

• Interface Meetings

You will also be provided with the templates for Meeting Minutes and Meeting Participants List for your use in your projects.

Even though the progress recording and measurement is not a task defined under contract management discipline, contract administrators should be well familiar with how it is done and transmitted to Employer.

The ways to record and transmit the progress are:

• Daily Report

• Weekly Report

• Monthly Report

In this lecture, we will discuss on how the progress should be measured and reported under the above-said reports.

Daily report is one of the most important deliverables that requires high importance and care while preparing. We should do our best to deliver it in high standards, from the first date of the project until the take over.

In this lecture, you will learn the key features of a daily report as well as its format. In the resources section of this lecture, you are provided with a best practice Daily Report template for your use by adapting it to your project.     

In addition to the witnessed inspection reports, there are some other tools like photos and videos which will prove the status of the works at a certain time in a project.

In this lecture, you will learn the most important tips while taking photos or recording videos as well as archiving those.

Until Employer officially accepts the performed works, Contractor will not be able to transfer the liability to Employer and hence will need to continue to protect the completed works. In this lecture, we will highlight some points about the acceptances by Employer before closing this section.

In each contract, there are some submittals which Contractor needs to provide Employer in a timely manner. Failing to do so will result in non-performance of the contractual obligations which is an undesirable situation. Therefore, as being Contract Administrator, you should be well aware of these submittals and ensure that they are provided to Employer by the relevant departments appropriately.

These submittals will be grouped under the following topics in this section:

• Drawings and Calculations, Specifications

• Material and Equipment Approval Requests

• Request For Information (RFIs)

• Developing Baseline Schedule

• Project Status Reports

• Compliance to Health, Safety, and Environment (HSE) Requirements

• Quality

• Warranties

We can't imagine a project where there is no technical submittals for Employer's information, review, and/or approval. Contract Administrator is not expected to prepare these submittals but should know what they are and whether the team does it properly or not.

Let's talk about Drawings and Calculation, and Specifications in this lecture.

Probably you are familiar with the material and equipment approval requests in a project. In this lecture, we will cover this topic by highlighting some important points like the requirements, samples, deviations, getting approvals, etc.

Most commonly known as Request For Information (RFI), RFI is the official request by Contractor when some guidance/clarification is officially requested from Employer. As Contract Administrator, you should know how RFIs are raised in your project as the given answers may result in deviations from the contract baseline.

In this lecture, let's discuss how to handle the RFIs in a project and the points that needs some attention.

In this lecture, we will discuss about developing baseline schedule. It is again not a task under Contract Management discipline but quite important as Contract Administrator will also benefit from it. You will learn what the key factors associated with baseline schedule are. There will also be a discussion on the information that the baseline schedule should include.

Probably you've either prepared or contributed to the preparation of Project Status Reports. In this lecture, we will mention some important points about this type of reports which will be helpful for you in your projects. 

When it comes to Health, Safety, and Environment, well known as HSE, we are all responsible irrespective of what our role in the project is. It is a culture that needs to be spread horizontally and vertically and we should all contribute to that effort. In this lecture, we will highlight some essential points regarding HSE.

We always find ourselves to overcome problems in a project without compromising on quality. Because it's the quality commitment which brought us this project and will continue to bring new projects, all team members should respect to this commitment and resolve the issues without any impact on Project's quality parameters.

Let's have a look at some key points on the quality in projects.

In this final lecture of the section, we will talk about one of most important subjects of a contract, "the warranties". We not only perform the work but also warrant that the works will be free from defects during an agreed period. This means that if there happen any defects due to material and/or workmanship, then we will fix it at no cost to Employer.

Even though it's a large topic, we will go into sufficient details on warranties in this lecture which will help you to understand and manage the warranties in a project. 

We will cover the following three types of warranties:

• Manufacturer's Warranty

• Supplier's Warranty

• Subcontractor's/Installer's Warranty

Sometimes it is called Variation or Extra Work or Additional Work, changes are inevitable in projects and may happen. For this reason, many contracts have some clauses for handling changes. In this section, we will go over some key concepts on managing changes in an effective way.

In this section, we will cover the following topics:

• Identifying a Change

• Change Management Procedure

• Preserving the Rights

• Keeping Changes Log

• Handling Backcharges

• Keeping Backcharges Log

In this lecture, we will talk about identifying changes in a project and the key principles to apply while handling changes due to several reasons like:

• Changes on Employer’s wishes

• Site conditions

• Disagreements or different interpretations of the clauses

• Changes on drawings/specifications

The discussion will cover the following main types of changes:

• Employer Initiated (or Directed) Changes: Employer sends a Change Order Request by specifying the scope of the proposed change.

• Contractor Initiated (or Constructive/Mandatory) Changes: Any changes other than Employer Initiated Changes.

Imagine that you have just joined an organization. You want to know how the business is done in that organization as quick as possible. Procedures, at this stage, play an important role to explain all the process to you and to provide the corporate templates. And Change Management Procedure is one of the most important procedures to have in a project.

In this lecture, we will explain a couple of points which are best practices while developing a change management procedure. We will discuss the requirement of following templates and contents in a procedure:

• Change Event Types

• Change Request Form Template

• Change Order Form Template

• Notice and Approval Processes

• Change Tracking Log Template

• Authorizations 

You are provided a Change Request Template in the resources section of this lecture.

You may think that your change proposal covers all the costs that you will incur. But probably not. There is one more important step related to the changes: preserving your rights. Let's talk about that in this lecture and share with you a typical reservation statement.   

Before completing talking about changes, we will discuss about how to track the changes. If you have just a few changes in a project, that's not a concern. But how about handling hundreds of changes which would definitely require a tracking system.

You are provided a changes log prepared in Excel in the resources section of this lecture.

Whenever we talk about handling changes, we should also remember that there can be backcharges in our projects as well which you should get ready to handle. It has similar processes like changes. Let's go over some helpful tips on handling backcharges in this lecture.

As similar to the changes, backcharges should also be tracked in a project. If you have just a few backcharges in a project, that's fine and no need to worry. But if there are hundreds of backcharges, then such requires a tracking system. In this lecture, let's talk about keeping backcharges log.

You are shared a backcharges log prepared in Excel in the resources section of this lecture.