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The Importance of Contract Lifecycle Management

Contract management is an essential component of a successful construction project. As the cost of delay and waste increases, so does the importance of managing the contract process to cut down on risk and expenses. The five phases of a construction project are defined in several different sources, but most agree that planning starts with the bidding process.

Once bids have been received, teams begin working on developing project plans. Construction managers should manage their contracts in accordance with the phases listed above to ensure that work gets done when and where it’s needed most. This article covers the importance of contract lifecycle management as it pertains to construction projects, including risks associated with each phase, best practices for managing your contracts, and practical examples from the construction industry.

What is Contract Lifecycle Management?

When a construction project is underway, the team leading the project will most likely use a traditional method to manage the construction project. However, using this method can result in delays and costs that are not properly reflected in the contract price. Contract lifecycle management is a process that helps contractors manage their contractual relationships with the government.

A contractor’s contract management approach helps the contractor avoid the costly mistakes and failures that can occur in the course of construction. By effectively managing the contract process, contractors can avoid the mistakes and delays that can derail a project. There are many benefits to using this process, including optimizing workflow, controlling costs, reducing risks, and improving quality.

Importance of Contract Lifecycle Management

According to a report from the National Contract Management Association (NCMA), there are three primary risks inherent in every construction project: risk of delay, cost over-runs, and waste. Each of these risks can be reduced or eliminated through contract management. The importance of contract lifecycle management can be seen in the following examples:

The Pinnacle Tower in Port Huron, Michigan, is a 401-unit residential building that was scheduled to be completed in December 2021. However, when work began, it was discovered that the foundation was unstable and would need to be replaced. The project was put on hold and then delayed again when the foundation was completed, and then the design was modified because of changes in the building guidelines for high-rise apartments. The total project cost rose from $300 million to $405 million due to these delays and cost overruns.

Best Practices for Contract Management

The best practices for contract management can be found in the following video produced by the American Society of Construction Contractors (ASCPC). The video explains how contractors use the five phases of a construction project to properly manage their contracts and avoid common mistakes.

Practical Examples from the Construction Industry

Construction projects often have long and involved processes, and it’s not unusual for contractors to have several different contracts at different stages in the project lifecycle. When a contractor has a large number of different contracts and/or foreign partners, managing them all can be difficult. Fortunately, there are a number of useful tools that make it easier to manage multiple contracts at the same time.

One example is the “virtual contractor”, which allows a contractor to manage multiple contracts from one computer. Another helpful tool is the “buyer’s guide”, which lets contractors view project Bid materials, Schedule, and Invoices with one click. This lets contractors know exactly how much work is left to do and how much progress is being made on each contract.

Conclusion

Construction is a unique industry with a unique set of risks and expenses. As these costs increase, so does the importance of managing your contracts to reduce risk and expenses. The five phases of a construction project are defined in several different sources, but most agree that planning starts with the bidding process.

Once bids have been received, teams begin working on developing project plans. Contract management is a process that helps contractors manage their contractual relationships with the government. This article covers the importance of contract lifecycle management as it pertains to construction projects, including risks associated with each phase, best practices for managing your contracts, and practical examples from the construction industry.

Uneeb Khan
Uneeb Khanhttps://blogili.com/
Uneeb Khan CEO at blogili.com. Have 3 years of experience in the websites field. Uneeb Khan is the premier and most trustworthy informer for technology, telecom, business, auto news, games review in World.

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