Effective Contract Administration and Management

Steve Garbe
During the property boom, the detail of a construction contract was not always top priority for Dubai’s real-estate market. Problems were often solved by spending more money. We’re now seeing a move towards a more mature market, with an emphasis on accountability at its centre.

We’re now seeing a move towards a more mature market, with an emphasis on accountability at its centre. Together with more constrained budgets, new levels of transparency are beginning to permeate the industry.

Pre-contract effectiveness impacts directly on post-contract outcomes, and there is a growing awareness of the need for effective contract drafting, administration and management throughout the project lifecycle.

There has also been a change in the way construction contracts are approached. Pre-contract effectiveness impacts directly on post-contract outcomes, and there is a growing awareness of the need for effective contract drafting, administration and management throughout the project lifecycle. Any ambiguities in the early stages may have potentially disastrous results later on. Therefore the most influential and cost effective method of contract management is getting the contract documents right in the first instance.

It has been common practice in the region for contracts to be put together quickly on a generic basis. This tended to leave gaps in terms of scope, risk, responsibilities and understanding – wide open routes for claims. With more emphasis on accountability, the region is seeing a shift towards more frequent use of formal dispute resolution processes such as arbitration. Parties had previously been very reluctant to explore this route due to the cost and timescales involved.

A tighter and effectively managed contract should form part of an effective dispute avoidance strategy, helping prevent claims arising and assisting in resolution should a dispute occur.

The increased focus on transparency has to an extent reduced the opportunity for quick settlements with minimal supporting evidence. However there is a potentially high cost involved in both pursuing and defending claims. A tighter and effectively managed contract should form part of an effective dispute avoidance strategy, helping prevent claims arising and assisting in resolution should a dispute occur.

Within our own client base, we are seeing a move towards more individually tailored contracts and a greater understanding of the benefits that this brings. Where a contract is more specifically tailored to the project, it allows more accurate scoping of the design and construction works and better alignment of risk and responsibilities. This leads to enhanced levels of cost certainty, typically a key priority for clients.

Faithful+Gould’s multidisciplinary Middle East team includes specialists in contract management, cost management, facilities management, whole life costing, claims and dispute resolution.