I have just completed a training course for a large contractor based in the Middle East. The title of the course was the The Practical Use of the FIDIC Contracts. The attendees were contract managers and contract administrators. The course consisted of weekly 2-hour online tutorials over a period of 6 weeks. After each tutorial, the attendees were given some case studies to examine. They then submitted assignments for grading.

After the first two week’s assignments had been submitted, I was able to reach the following conclusions:

• Despite most of the contractor’s projects being FIDIC contracts, the attendees had very poor knowledge of the contract.
• Many of the attendees based their answers on usual practice and what had been done previously, rather than the actual contract provisions.
• Most of the attendees failed to justify their answers by making reference to the contract.

Contracts managers and contract administrators are responsible for ensuring that:

• The contractor complies with his/her contractual obligations.
• The contractor receives any rights and remedies contained in the contract.
• The employer and engineer act in accordance with the contract.

Given the above, these gaps in knowledge present many risks for the contractor. There was no doubt that the training had benefit. As the attendees worked though the course and followed our advice, not only on the conditions of contract, but on how to deal with contractual matters, their grades improved.

Studies on international disputes over many years have revealed that some of the leading causes of disputes are:

• Failure of the parties to comply with contractual obligations.
• Failure of the project participants to understand the contract.
• Inadequately trained and qualified persons responsible for contract administration.

Our client’s contract administration clearly needed improvement. Hopefully our training has gone some way towards avoiding contentions and disputes on their projects. This company realised that they had a problem and took steps to provide a solution via staff training. Unfortunately, many companies continue to get things wrong, finding themselves in difficult and costly situations.

So, for those facing similar problems, here are my top tips for effective contract administration:

• Ensure that you have adequately trained and qualified staff on the project to deal with contractual matters.
• If you do not have such staff, seek the advice of others, perhaps from head office or external consultants.
• Ensure that you understand your contract and comply with your obligations.
• Be aware of the obligations of other project participants and check compliance.
• Ensure that your project procedures, including any forms and templates are in accordance with the contract.
• When dealing with contractual matters, justify your position by reference to the provisions of the contract.

I hope this helps you to provide effective contract management and to avoid contention and disputes. For those looking to improve their skills in contract administration, this e-course may be of interest. Or for team training, get in touch directly to discuss your needs.