Brief Introduction

Contract Management
 Rule to Follow
• Maintain the Discipline
– Come in class on time. Otherwise absent.
• Feel free to ask anything you don’t understand
• 80% attendance is must. Otherwise no exam.
• Student ID is must.
• Submit assignments on time.
– Negative (-20%) marks/day delay
– After 2 days , it will not be counted.
• Quiz will not be repeated. Absent student will get zero marks.
• Cell phone should be on silent. Preferably switched off.
– Should NOT attend at all.
• Respect the norms of multicultural society
• Remember: Team work is always better than individual
work

Dr. Ahsen Maqsoom (CIIT, Wah Cantt)

 Objectives of This Course

 To give participants a broad introduction to the subject of

contract management to manage contractual issues at
construction sites.

 To acquaint the course participants comprehensively and at

considerable depth with construction contract management
by using up-to-date literature and research on this highly
interesting, challenging, and increasingly important field.

 To motivate the CM participants to apply their acquired

knowledge to construction projects of different types and
levels of complexity which they will be directly or indirectly
involved in and to help them undertake their projects
systematically and more effectively and efficiently.

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 Objectives of This Course Module

 To show that construction management has, over the past

five decades, evolved into a very substantive body of
knowledge and that a good understanding of contract
management is crucial for managing a construction project.

 To promote networking between the CM participants and to

encourage them to share in and outside class their personal
experiences of contractual issues related to projects.

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 Course Outline

• Introduction
• What is Contract Management?
• Contract Management Functions – Service delivery
management, Relationship management, Contract
Administration
•
• Procurement Methods
• Bid Method: Enlistment or registration of contractors,
prequalification of contractors, types of tenders, Pakistan
Engineering Council (PEC) bidding documents, opening of
tenders, scrutiny of tenders, tenders evaluation.
• Negotiated Method

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 Course Outline

• Contracts for Construction

• Types of Construction Contracts: Lump-Sum Contracts,
Unit-Price Contracts, Cost-Plus-Fee Contracts, Guaranteed
Maximum Price Contract
• Contractual relationships
• Pakistan Engineering Council (PEC) Contract Documents
• Pakistan Standard Conditions of Contracts
• Special Conditions of Contracts

• Contracting Methods
• Design-Build
• Design-Build-Operate

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 Course Outline

• Contract Disputes
• Reasons of Contract Disputes
• Clauses of Contract to Prevent Disputes
•
• Dispute Resolution
• Methods of Dispute Resolution
• Mediation, Arbitration and Dispute Resolution Boards
•
• Contract Surety Bonds (Guarantees)
• Bid Bonds
• Performance Bonds
• Payment Bonds
•

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 Course Outline

• Contractor Insurance
• Worker’s Compensation Insurance
• General Liability Insurance
• Equipment Insurance
•
• International Contracting
• International Contracting
• Joint Ventures

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 Recommended Course Books
Yates, J. K. (2010). Engineering and Construction Law and
Contracts. Prentice Hall

Jimmie, H. (2000) Construction Contracts. 2nd Edition,

McGraw-Hill

Fisk, E. R. and Reynolds, W. D. (2010). Construction Project

Administration. 9th Edition, Prentice Hall.

Murdoch, J. and Hughes, W. (2008). Construction Contract:

Law and Management, Spon Press.

Uher, T. E. and Davenport, P. (2010). Fundamentals of

Building Contract Management. UNSW Press.

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 Recommended Course Books
Barrie and Paulson. (1992). Professional Construction
Management: Including C.M, Design-Construct, and General
Contracting. McGraw-Hill.

Griffith, A. and Watson, P. (2004). Construction Management:

Principles and Practice. Palgrave Macmillan, New York.

Schexnayder, C. J. and Mayo, R. E. (2003). Construction

Management Fundamentals. McGraw-Hill

Harris, F. and McCaffer, R (2001) Modern Construction

Management. 5th Edition, Blackwell Publishing Company,
London, UK.

Fellows, R. Langford, D. Newcombe, R. and Urry, S. (2002).

Construction Management in Practice. Blackwell Science Ltd.

Levy, M. Sidney. (2000). Project Management in Construction.

McGraw-Hill.

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 Recommended Course Books
Hendrickson C. and Tung Au (1989). Project Management for
Construction. Prentice Hall, New Jersey.

Dunham C. W. and Young R. D. (1986). Contracts,

Specification and Law for Engineers. McGraw-Hill.

Roy Plicher (1992). Principle of Construction Management.

McGraw-Hill.

Oberlender, D. Garold. (1993). Project Management for

Engineering and Construction. McGraw-Hill.

PMI. (2000). A Guide to the Project Management Body of

Knowledge. Project Management Institute, USA.

Kerzner, Harold (2000). Project Management: A System

Approach to Planning, Scheduling, and Controlling. John Wiley
& Sons, Inc.

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 Recommended Course Books
Project Management: Strategic Design and Implementation
David I. Cleland & Lewis R. Ireland
McGraw Hill, 4th edition, 2002

Project Management: The Managerial Process

Clifford F. Gray & Erik W. Larson
MGraw Hill, 3rd edition, 2006

Project Management: A Managerial Approach

Jack R. Meredith & Samuel J. Mantel, Jr.
John Wiley & Sons, 6th edition, 2006

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Assessment of the
CM Course
Participants
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 Assessment of CM Participants
(Distribution of Course Marks)
4 x Assignments/ Presentations (10 Marks)
Participants are expected to show that they can convincingly
relate concepts discussed in class with their construction project
related professional work. Assgnments can be written in typed form
and must be submitted in the next class.
Each participants will deliver one to two presentations on the
assigned topic by the instructor. Presentation may also be delivered
in groups comprising of 3 students maximum.

4 to 6 x Quizzes (10 Marks)

At least three quizzes will be conducted without mentioning the
date and time in advance. Quizzes may include fill in the blanks or
true /false or multiple choice questions.

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Introduction to Contract Management
Chapter 1
Dr. Ahsen Maqsoom
COMSATS Institute of Information Technology
(CIIT)

15
 LECTURE 1
INTRODUCTION

What is Contract Management?

Contract management is the process that enables both

parties to a contract to meet their obligations in order
to deliver the objectives required from the contract.

It also involves building a good working relationship

between the two parties. It continues throughout the
life of a contract and involves managing proactively to
anticipate future needs as well as reacting to situations
that arise.
The central aim of contract management is to obtain
the services as agreed in the contract and achieve
value for money. This means optimising the
efficiency, effectiveness and economy of the service
or relationship described by the contract, balancing
costs against risks and actively managing the
relationship between the two parties. Contract
management may also involve aiming for
continuous improvement in performance over the
life of the contract.
CONTRACT MANAGEMENT FUNCTIONS
•Service delivery management ensures that the service is being
delivered as agreed, to the required level of performance and
quality.

• Relationship management keeps the relationship between the

two parties open and constructive, aiming to resolve or ease
tensions and identify problems early.

• Contract administration handles the formal governance of the

contract and changes to the contract documentation.

All three areas must be managed successfully if the

arrangement is to be a success.
ESSENTIAL FACTORS FOR GOOD CONTRACT
MANAGEMENT

•Good preparation
An accurate assessment of needs helps create a clear output-
based specification. Effective evaluation procedures and
selection will ensure that the contract is awarded to the right
provider.

• The right contract

The contract is the foundation for the relationship. It should
include aspects such as allocation of risk and quality required
as well as procedures for communication and dispute
resolution.
•Service delivery management and contract administration
Effective governance will ensure that the customer gets what is
agreed, to the level of quality required. The performance under
the contract must be monitored to ensure smooth running of the
project.

• Relationship management
Mutual trust and understanding, openness, and excellent
communications are as important to the success of an
arrangement as the fulfilment of the formal contract terms and
conditions.
•People, skills and continuity
There must be people with the right interpersonal and
management skills to manage these relationships on a peer-to-peer
basis and at multiple levels in the organisation. Clear roles and
responsibilities should be defined, and continuity of key staff
should be ensured as far as possible. A contract manager (or
contract management team) should be designated early on in the
procurement process.

• Knowledge
Those involved in managing the contract must understand the
project fully and know the contract documentation inside out. This
is essential if they are to understand the implications of problems
(or opportunities) over the life of the contract.
•Flexibility
Management of contracts usually requires some flexibility on
both sides and a willingness to adapt the terms of the contract to
reflect a rapidly changing world. Problems are bound to arise that
could not be foreseen when the contract was awarded.

• Change management
Contracts should be capable of change (to terms, requirements
and perhaps scope) and the relationship should be strong and
flexible enough to facilitate it.

• Proactivity
Good contract management is not reactive, but aims to anticipate
and respond to future needs.