Contract Administration

# Chapter 13: Contract Administration  Contract administration sits at the heart of your registration journey, it's where theory meets the messy reality of construction sites. You'll wear three hats simultaneously: advocating for your client's interests, protecting design integrity, and acting as an impartial certifier under the contract. The trick? Knowing when to switch between them. With AS 4000:2025's first update in 28 years and the new Building and Plumbing Commission taking over in July 2025, you're entering practice during significant regulatory change. Post-2020 construction has transformed routine administration into active crisis management. Material lead times stretching to 12 months mean "no substitutions" is fantasy, you'll assess alternatives weekly, balancing performance requirements, aesthetics, and budget while keeping projects moving. Victorian builders locked into fixed-price contracts (no rise-and-fall clauses under $500,000) are particularly vulnerable, making variation management critical. Your independence matters legally. When certifying progress claims or assessing EOT applications, follow contract terms, not client preferences. Document everything: variation authorisations before work starts, substitution assessments with performance comparisons, and fair evaluation of delay claims. Most disputes stem from poor communication rather than technical issues. Regular site visits, prompt responses to RFIs, and transparent decision-making prevent most conflicts before they escalate. **Key Terms:** - **EOT**: Extension of Time, formal adjustment to contract completion date due to qualifying delays - **Progress claim**: Contractor's periodic payment application based on completed work percentage - **Variation**: Approved change to original contract scope, requiring written agreement and cost adjustment - **Practical completion**: Project stage where works are complete except minor defects, triggering handover - **RFI**: Request for Information, formal contractor query requiring architect response ### **Navigating Payment Certification** Payment certification feels daunting initially, but it follows a logical process. You'll receive the contractor's claim, typically monthly, detailing completed work percentages and materials on site. Your job? Verify these against actual progress within the timeframe specified in the contract (usually 10-14 days). Site inspections become your best friend here. Take photos systematically, they're your evidence if disputes arise months later. Check claimed percentages against physical progress, verify materials match specifications, and ensure work quality meets contract standards. Remember, you're certifying value of work done, not just money spent. If the contractor bought materials but hasn't installed them, that's their cash flow issue unless the contract specifically allows for unfixed materials. The tricky bit comes with incomplete or defective work. You'll need to assess reasonable deductions while maintaining working relationships. Document your reasoning clearly, "20% deduction on plastering due to visible defects requiring rectification" beats "plastering incomplete." Most graduates underestimate how contentious payment certificates become when projects face financial pressure. ### **Managing Variations in Fixed-Price Contracts** Victorian domestic contracts create unique challenges. With rise-and-fall provisions banned under $500,000 and Consumer Affairs yet to approve required escalation notices for larger projects, you're managing variations within tight legal constraints. Every variation needs written agreement before work proceeds, verbal approvals will haunt you. Structure your variation process: contractor submits written request with cost breakdown, you assess impact on design and budget, client approves in writing, then work proceeds. The five-day response window for owners means you need efficient systems. Create standard templates for variation requests, assessments, and approvals. Track cumulative variation costs, nothing surprises clients more than discovering variations equal 30% of original contract value. Material substitutions dominate current variation discussions. When specified products have 12-month lead times, you'll evaluate alternatives constantly. Document equivalence assessments thoroughly: performance specifications, aesthetic impact, warranty implications, and cost differences. Your professional liability insurance covers these decisions, but only if you've documented your reasoning properly. **Key Terms:** - **Rise-and-fall clause**: Contract provision allowing price adjustments for labor/material cost changes (prohibited in Victorian domestic contracts under $500,000) - **Unfixed materials**: Materials delivered to site but not yet incorporated into works - **Qualifying cause**: Specified event entitling contractor to extension of time (e.g., client variations, latent conditions) - **Liquidated damages**: Pre-agreed daily amount payable for delayed completion - **Retention**: Percentage of payment withheld until defects liability period expires (typically 5%) - **Defects liability period**: Post-completion period (usually 12 months) where contractor must rectify defects