Many issues arise when a construction project is underway. As such, to avoid such instances or at least minimize the same, it is essential to lay a solid foundation by having in place a construction contract. This will ensure that your liability is minimized to a great extent. Since we understand the importance of having an effective contract management plan, time and again we emphasize how vital it is and we guide our clients accordingly.
Talking about the contract management plan, it is essential to understand that there are a few components of the same that enhance the effectiveness of the plan. So, what are these elements or appropriately, components? This is what we will try to get an insight into in the write-up. So, let us delve deeper into it.
5 Vital Components of a contract management plan
To enjoy the best legal protection to ward off legal hassles, the contract management team must include these key components. This should be worked out even before the construction project kicks in. So, here we are.
- Scope of the Project
When it comes to defining the term “scope of work”, this is a general term and refers to a generalized job description. This can be better understood with the help of a small example.
For instance, if talk about the role of a drywall contractor, usually comprises work related to material, budget, price, deadline, interior finishing, and designs to name a few. So, when you define the scope of work, make sure you include all the essential aspects of quality, schedule, materials, and so on.
- The time frame of the project
The owner of the property might have in mind a particular deadline. However, it is up to the contractor to see that the time frame expected by the property owner is reasonable and practical or realistic. So, this specification and aspect must be mentioned in the contract management plan. The plan must mention provisions for delays not within control, the start date of construction, completion data, permitted issues, and so on.
- Cost and terms of payment
An important advantage of having a well-drafted contract management plan is that it becomes easier to deal with the payment terms. Be clear about any aspect that appears to be uncertain, or construction services, and material cost. Most importantly, the payment schedule that you include in the contract must be adhered to.
- Clauses related to resolving disputes
Despite having a well-written and well-defined contract, there always is room for disputes to arise. So, in such a scenario, there must be a provision for settling the dispute as well. A termination clause must also be included in case there is any breach.
- Constant communication
If the firm that will draft your contract management plan is good, it will foster persistent communication with its clients. It will ensure that the client is safe in their hands.
How do you know that the contract management plan is successful?
You can ascertain that your contract management service provider has been honest if you identify the following-
- The anticipated business benefits and value for money are being attained.
- There is adequate response and cooperation from suppliers
- There are no disputes
- No surprises to deal with
- There is the realization of efficiencies.
- The service delivery and related arrangements are satisfactory
In a nutshell, five determinants influence the failure or success of a contract management plan. These are managing risks, ensuring well-defined role and responsibilities, clarity in reporting lines, making payments on time, and last but not the least, correct assignment of resources.
Contract Square has been successfully meeting the above prerequisites year after year and living up to the expectations of the clients.
For more information on how we may offer our assistance to you in contract management and agreement, you can reach us at firstname.lastname@example.org or call +91 9903023893.