CONTRACTING FOR

PROJECT MANAGEMENT
EMCM510
3

Dr. Abdulrahaman Alsharjabi

 REFERENCES

MAIN BOOK:
J. Rodney Turner, J. R. (2003).
Contracting for project management.
 CONRTACT
MANAGEMENT TOPICS
Topic 1 Roles and Responsibilities in Project Contract
Management
Topic 2 Contracts and Payment Structure
Topic 3 Far-sighted Project Contract Management
Topic 4 Standard Forms of Contract and Documentation
Topic 5 Contract Law 1
Topic 6 Contract Law 2
Topic 7 Partnering Joint Venture and Benchmarking
Topic 8 Procurement and Bidding
Topic 9 Managing Variations, Claims and Extension of
Time
Topic 10 Successful Project Management
TOPIC
1
 Roles and Responsibilities in
Project Contract Management

Dr. Abdulrahaman Alsharjabi

 BY THE END OF THIS TOPIC,
YOU SHOULD BE ABLE TO:
Define project and contract;
Describe the roles of the various parties in a project,
especially the managerial roles concerning project
supply chain;
Apply contract administration in the project
management context;
Describe how different types of contract attempt to
define managerial roles and deal with the
relationships between the client, contractor and
subcontractor.
Differentiate between the traditional procurement
route/contract and modem approaches which place
more responsibility on the contractor;
 Introduct
ion
In this chapter, we consider the roles required throughout
the project supply chain, particularly during the design
and construction stages, and what contract types are
available to provide the additional roles in different ways.
The contract is the mechanism by which:
the project organization is created;
project managers are employed;
goods and services are procured;
the commercial nature of the project process is
defined.
It is important for project managers to be aware of how to
operate effectively using the contractual procedures to
optimal advantage
 Project
Procurement
Ideas for projects arise from many sources, including strategic
planning, market forecasts, process re-engineering or
suggestion by a speculative developer.
A client considers the viability of these concepts to determine
the extent to which it wishes to participate. This varies from
client to client and project to project, from being a wholly
internal, private project executed by direct labor to a public
sector concession awarded to an external promoter.
Whatever, similar functions need to be undertaken, many of
which must be sourced from outside the clients organization.
The roles and responsibilities for the management of a project
can be viewed as a hierarchical sequence of interlinked
functions (Figure 1.1).
ROLES AND
RESPONSIBILITIE
S IN PROJECT
CONTRACT
MANAGEMENT
 One of the most important decisions to be taken after the
client is satisfied with the project concept and viability is
the choice of procurement strategy.
Identifying number of parties involved and their
responsibilities. This is not always straightforward and it is
important to remember there are always alternative
procurement routes available for any project..
Consider the number of different procurement strategies
available to fulfil the roles illustrated in Figure 1.1. We start
by considering the traditional approach, and then describe
others as variants on this model. Ultimately, it is the client
who must determine the procurement strategy to its optimal
advantage.
 The Traditional Project
Contract Strategy
As a starting point for the consideration of the roles and
responsibilities of parties to a project suitable for all
types of business, engineering or industry, we consider
the traditional structure used extensively in the UK
construction industry. This involves three parties:
A client who initiates and sanctions a project.
A consultant who undertakes the feasibility and
design.
A contractor who is responsible for implementing the
project.
 THE CLIENT In the traditional
procurement strategy, the client is the
organization which desires the project,
often owns the site, usually funds the
project and is frequently the end-user
THE CONSULTANT: Consultants or
consulting engineers are charged with
three main functions:
Management of the design process.
Assistance in tendering and contract
administration.
Site supervision.
 THE MAIN CONTRACTOR: Traditionally, a single
main contractor would be appointed, usually after
the completion of the design, to undertake
construction only. The contractor would have
responsibilities for planning the works,
mobilization, construction and opening or
commissioning.
THE PROJECT MANAGER: It is common for
many organizations to manage by projects and to
employ key personnel as project managers. (Client
representative)
THE PROCUREMENT PROCESS: One of the first
actions of the project manager, after determining
viability and degree of risk, is to determine the
project objectives. In all projects the primary
targets, time, cost and performance are important.
 Alternative Project
Contract Strategies
INTEGRATED STRATEGIES: is to
integrate roles and
responsibilities for phases of the
project.
 Design and build: requires the client, often with a
consultant, to complete the usual front-end activities,
but instead of appointing a contractor on the basis of a
completed design, only an outline design or a design
brief would have been prepared.
Turnkey: Turnkey contracts as the name suggests are
contracts where the client, on completion, turns a key
in the door and everything is working to full operating
standards. Consequently, turnkey contractors have
responsibility for the design, construction and
commissioning phases of a project.
Concession: The transfer of almost the entire project
is the possibility considered under the concession or
FinanceBuildOwnOperateTransfer (FBOOT)
strategy. This subcategory covers almost all of the
project life cycle including operation and maintenance,
and the functions, roles and responsibilities of most of
the parties
 MANAGEMENT
STRATEGIES:
 Emerging Project
Contract Strategies
During the 1990s, there was a clear trend away from
adversarial contracting strategies towards collaborative
working, which has direct implications for the role and
responsibilities of the project manager. In any type of
collaborative working, there is a need to align goals, so
incentives are often used, and there is a need for new
agreements and contracts and a greater requirement for
good management practice.
JOINT VENTURES AND PARTNERING:
PUBLIC PRIVATE PARTNERSHIP (PPP): Public private
partnerships (PPPs) are a separate class of organizations which
operate in a variety of ways but share the obvious common
feature of having both public and private sector funding
DISPUTE RESOLUTION : Disputes and more importantly dispute
resolution are key issues in any collaborative agreement (see Chapter 9).
Increasingly, the project manager is involved in finding equitable, speedy and
cheap methods of resolving disputes and maintaining focus on the project.
 THE PROJECT MANAGER: Although the
role of project manager is similar in any
collaborative venture, the longer the
duration of the collaborative agreement the
more difficult it becomes for the project
manager to resolve the dichotomy of
working with long established but time-
limited partners.

SPLITTING THE ROLES OF THE

ENGINEER:
Clients agent roles: namely designer,
supervisor and project manager
Adjudicator, an external role supported equally
by payments from client and contractor.
 Standard Terms for
Project Managers
General term developed by Institute of Civil
Engineering
Specific term develop as needed
These terms will bring benefits in understanding,
ease of use and common documentation if they
become widely established.
The flexibility and applicability of the standard
terms is further increased by having a permanent
set of core terms and the choice of one from a
number of sector specific schedules of services.
 Future
Trends
In the UK, move towards a more project-focused, collaborative
system of working and sharing best practice and world-class
performance.
Managing by projects is now becoming accepted across all sectors
of industry. Even service provider organizations are moving towards
the mechanism of internal and external projects as the basis for
strategic development, managing change and adopting best
practice.
The spread of project management is likely to continue. It is
interesting to note that European bankers publicized the project to
introduce the Euro, a term which would not have been used a few
years ago.
It is always difficult to predict the future, but in essence this is what
project management is about. Hence to foresee the future of project
management itself is even more of a challenge.
No project management or managers needed if we can guarantee
 Summary
Definition of a project:
A project is a temporary organization to which
the project owner assigns resources to achieve
their development objectives. It also requires
resources from outside via contracts.
Traditional project contract strategy is
needed as well new ones.
The three parties involved in a project are
the client, the consultant and the contractor.