Contract Management: GBEPM 740 (1) P M MUKALULA - Lecturer Johnstone Mwandu - Student 0966-628176

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CONTRACT MANAGEMENT

GBEPM 740 (1)

P M MUKALULA – Lecturer
Johnstone Mwandu - Student
0966-628176
Contract Management - Introduction

• In the foreword of the Guide to Procurement,


Tendering and Contract Administration by
Hackett et al (2007) state that
• ‘Future industry professionals should seek to
gain a breadth of knowledge covering the
whole construction process, the procurement
systems available and the documents
establishing, governing and regulating the
project.’
Contract Management - Introduction

• Taking the statement apart, it reveals that we


must be armed with knowledge regarding:
1. Construction Processes
2. Procurement Systems and the
3. Documentation available that establishes,
regulates and governs ‘the project’
Contract Management - Introduction
• To put the matter simply as we consider this subject,
projects are generated, executed and must be
completed.
• But what portends a successfully managed contract?
• For many, the answer is a project that meets the
project tenets of TIME, COST and QUALITY (note:
essential to understand the interplay of these factors
on a project).
• The question then is “How do we achieve these
BEFORE a project BEGINS not AFTER it begins?”
Contract Management - Introduction
• But is it possible that the client can be sure of
TIME, COST and QUALITY before a project
commences?
• How do we incorporate whimsical (spur of the
moment) changes?
• What of complex projects whose capacity would
be ‘mega’?
• ALL THESE IMPORTANT ISSUES ARE ADDRESSED
IN CONTRACT MANAGEMENT.
Mega Projects

Three Gorges Dam Project, 1993—2009


TGP – China, Yangtze River
Tibet Railway, 2001—2006
Beijing 2008 Olympics Projects, 2004—2008
Beijing building
Modern building by London bridge
Contract Management - Introduction
• Why have I given these examples? Zambia has seen some major projects
undertaken e.g. the Chirundu road works, of course everyone knows how
things have turned to be.
• Statistics in Zambia according to a research carried out suggest that over
50% of construction work that goes out on construction shop floor end up
(Note: 5th year thesis):-
• with cost overruns (variations) by way of
• extension of time,
• some have drastic changes to the initial scope of work ,that in turn
• have huge cost implications on the client
• Others end up in the courts
• Others default
• Yet others pursue arbitration
Contract Management - Introduction
• J W Ramus in his book “Contract Practice for Quantity Surveyors”
looking at the role of parties (those of employer and contractor
as well as consultant QS) to a contract says
• “Both parties to a contract, employer and contractor, are bound
by the terms of that contract, having been freely agreed to by
them when they signed the contract. Should any of those terms in
its practical application become disadvantageous, or even
financially disastrous, to either party, the quantity surveyor has
no authority to vary the provisions in order to alleviate those
consequences.”
• The importance of Contract Management cannot be
overemphasized! Imagine, once signed, very little changes.
Contract Management - Introduction
• The relevance of carrying out a post mortem on several factors that affect
projects in this course is unequivocally essential.
• The course contents cover a variety of related subjects which include:
- Types of Contract
- Best Value and Partnering
- Conditions of Contract
- Partnering, Alliances and Joint Ventures
- Managing changes and scope or programme
- Conflict and dispute resolution
- Construction Case studies
- Managing contracts on infrastructure projects in developing countries – we
will draw much from many projects in Zambia and other interesting ones
such as the Channel Tunnel (UK – France)

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