Project Contract Management

Contract of the Federal Government

Introduction to Project Management

In modern business world the role project management has been increasing due to availability of varied opportunities. The requirement of managing the overall project lies on an entity as the owner are needed to assess their existing capabilities in order to generate future skills in the shells of technical framework. This project report is all about management of the entire contract which is based on the building of the townships of the federal government. This also stresses on the varied categories of the procurement strategies such as Conventional, Turn key and Concession methods which helps an entity in order to complete the overall contract. The roles among three entities such as owner, contractor and sub-contractor are explained throughout the report.

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Question 1

a)The project is about management of the contract of the federal government under which the economic planning unit has identified (Baguley, 2016). This unit has ascertained in order to build new township which is a big project near XX town in YY city. The responsibility on the manager who organised all the details in a particular manner in order to deal with all kinds of the problem's comes throughout the project. It is regarded as big and complex project as it is consists of mixed developments including 2000 units of housing schemes framed to cater the needs and expectations of all the users to get benefit from the current schemes in near future for the betterment of their users. The division of the existing schemes into various categories will be helpful for the organisation as their target is to achieve their goal in given time frame. The budgeted time span of completing this project till 2019 with immense support from all the external parties. The basic support required for completing this project is financial and human resources (Hearld and Carroll, 2016). The tasks duties are bifurcated which will assists an entity in completing their duties in a given period of time. It includes various services such as site clearing, arranging blocks of 20 multi storey offices, houses and apartments, roads and bridges, services and utilities, religious centre, schools band recreational areas like parks to facilitate all the consumers and the citizens of the city as the social welfare activities are conducted to lure all kinds of citizens towards the government by enhancing the support among them. The society can also support in the biggest aim of the government by voluntarily take part in the event.

b)Procurement is regarded as the integral aspects which is involved in the construction industry as it is the process which is often described as complex network of relationships which are formed between clients, consultants and construction companies to deliver good output for the selected building project. It is essential categorise the contractual relationships from managerial links in the modern business environment where collusion is the basic element which will deteriorate the current performance of an entity in order to pull down their existing skills and talents. The existing capabilities need to be nurtured in order to deliver good amount of output by using minimum input in the business (Addicott, 2016). There are various kinds of procurement strategies that can be used by an organisation which are given as below:

Conventional methods-This method is also recognised with different names such as traditional and lump sum method. In this kind of approach the clients accepts with the fact that the appointment of the consultants for designing, controlling the cost and administration of the contract. The contractors or the owner who owns the responsibilities of the client for accomplishing their building project according to the specifications given by the owner. In this method the wholesome payment is done on the part of the client and all other designing and other specifications are decided by the owners (Baguley, 2016). It is suitable method as from the part oft client the restriction on the budget has defined and the employer is solely responsible to complete the project with quality and without exceeding the defined limit of the project. The responsibilities of the contractors will involve hiring sub-contractors, suppliers as the client will play no role in order to intervene in the mid process of the building project. It is not suitable for client in that case when the lower budget of the client will be able to produce low quality project which will not able to meet the expectations of the clients. On the other hand the owner may get suffered loss when the materials used in the overall building project get increases then the employers can suffered with the heavy amount of loss. This kind of contract can be done in two methods such as accelerated traditional method in which the variants are provided by the owner as per the budget level of the client which will facilitate both the parties in order to earn profit or save the overall cost involved in the project.

Turnkey procurement strategies- It is one of the type of procurement strategies which is commonly used in the construction industry which is a type of project (Addicott, 2016). This kind of project in the construction companies ion which the project can be sold to any buyer as a completed product. This is also regarded as build to order in which the constructor builds a building in which the buyer will specify their requirements as one of the framework for completing the overall project according to their specifications. This type of project in which incomplete product that is the construction or whole house are offered to the clients and the interior designing is done by all the clients. This approach is turnkey computer systems which is regarded as complete computer which involves hardware, operating system and the application. The 3D print image of the overall house is the design showed to the clients to please them for the prospective projects presented in present in a virtual context.

Concession contract- It is considered as final procurement strategies which can be used by an entity generally in the construction industries. The concession agreements is referred to as grant of rights, land or property by a government or local authority of the city. This kind of contract can be used by the local government as the nature of this kind of business is associated with the government. The public related services includes water supply which may be operated as a concession which will support an entity in accomplishing the goals and the objectives in a given point of time (Aluonzi, Oluka and Nduhura, 2016). In the construction companies the services are supplied by these authorities in order to complete the project in a given time span as it is regarded as public service concession. This type of service concession agreements in which private company enters in order to enjoy exclusive right to operate, maintain and carry out all the investment in a public utility for given number of years. The years of availing this kind of services is limited to the total years of completing a given project.

d)From the above evaluation of the three procurement strategies which are commonly used strategies in the construction industries are properly analysed (Baguley, 2016). The different parameters has helped an entity in order to ascertain their true performance in a given period of time. The selection of best procurement strategies is important as it helps an entity in order convene their business proceedings in a  systematic flow. It can be recommended to the enterprise who intends to select a best strategy in order to build township which is complex job and which requires good back sourcing in terms of financial, capital and human resources. These resources will assist an entity in conducting their overall project in a given time span by catering the needs and expectations of the clients from this project (Baguley, 2016). Conventional/ traditional method will be selected for this particular project. It is selected as the contractors will be able to produce good project by applying their own skills and knowledge without getting disturbed from the specifications provided by the clients. It is suitable for the clients as the employer may use innovative and creative technologies in the business in order to produce low cost output with quality oriented results (Bhutad, 2016). This power given by the client to the contractor will always results in good building project. The handling of all the responsibilities on the shoulder of the contractors will; be beneficial for the client in return as financial boundaries are defined by the buyer by imposing budgeting constraints.

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Question 2

a) Under standard payment involved in the construction industries where contractor get payment progressively throughout the overall time required in completing the project (Schooner and Castellano, 2016). There are different steps which involves in the progress payment process made during the construction which are given as below:

  • Progress claim- It is that document which involves the assessment of the contract at particular interval which will presented to the architect.
  • Assessment of claim- In this step the architect assess the claim presented by the contractor in order to determine the monetary amount to be paid by the contactee for the contract.
  • Progress certificate- The publishing of this certificate from the contractors side which includes tax invoices for making payment by the client.
  • After getting the progress payment certificate which is presented by the contractor to the owner of the building to make payment within a given time limit which is mentioned in the certificate provided.

b)The contractor and owner who owns the possession of the main contract has certain role and responsibilities with regard to sub-contractor which are explained the given below criteria:

Access of Control- In accessing control on the total project which is established by the contractor for the owner is totally depends on the type of construction approach used by the contractors. In general terms the basic possession held with the owner of acquiring the overall project as they paid the contractor for building the project. The sub contractor is appointed by the contractor who handles its responsibility to other person. The responsibility of the contractor is pay back the money to the sub contractor for completing their work.

Monetary value- The standard measurements limits are set by an entity that is the contractors in order to measure the overall value of the project in terms of consideration of project(Vyas, 2016). The monetary value assessed by the architect will need to pay by the owner of the project to the contractor which are proportionally divided among the two parties such as contractor and sub-contractor and the architect will be offered with the fees.

Performance indicators-These methods will be helpful for the contractor as it is one of the symbol which will reflect the progress of the overall contract in a specific time interval. The preparation of time sheets are presented to the owner in order to ensure the overall time limit of the contract. This schedule will guide sub-contractor to complete their work in a given time span.

Task scheduling- This scheduling various tasks and duties will organise the overall contract of the contractor which is divided among the sub-contractor which will further help them in order to cater the needs and expectations of the client as their main motive is to manage the overall contracts given by the contractor (Hearld and Carroll, 2016).

Monitoring-Dashboards are also used by an entity in which owners and project contractors can ensure its overall performance by seeking all kinds of information which will assist an entity in conducting their business or realising their own skills and talents. These controlling technique will assist an enterprise in managing their performance in comparison with the standard guidelines framed by an entity whose major focus is on the accomplishing all the gaols and the objectives in a given period.

c)The contractor major responsibilities is to cater the needs and expectations as their main motive is to complete the overall goal of the company by considering each and every information supplied by the client which is the owner of the contract (Addicott, 2016). There are several responsibilities of the contractor towards the owner in relation with the delaying of the overall contract after exceeding the time limit of three months which has mentioned on the acceptance of the letter which are given as below:

Disclosures- The owner is required to give disclosure to the contractors in that case where the owner extends the overall time limit of the project without informing the contractor. The information is required to be presented to the contractor as in absence of information which may leads to the deterioration of the overall aim of the project (Pate and Scullion, 2016). The disclosures are necessary as it essential fort an entity as the material effects generated from this project will be borne by the owner itself. The IAS also affected in this case as the accounting of contracts is personally investigated by the contractor as they are liable to assessed their overall income. The contractors are required to meet all the disclosures requirements as their main motive is to present the good figures without manipulating with the existing figures. This IAS ensures that the contractor has complied with all the disclosures requirements which will protect the interest of the owner.

d)The certificate of making good defects is that appreciation which is on the practice completion has been certified that the defect's liability period has begins which is around a period of six to 12 months (Prassl, 2016). This period in which client can reports any significant errors detect by them that rise in the work to contract of the contractor or administrator who decided to seek all the errors or defects in the project by making significant changes in order to please all kinds of the customers. These errors can also be maintenance issues which is the responsibilities of the owner in order to take care about the errors and defects. After the end of the defects and liability period the contractor prepares a list of all the discovered errors during this period which are not rectified which are agreed by both the parties to contract on a particular date by which these errors may get rectified in order to facilitate their clients. After taking into consideration all other errors discovered by the client from the project which are also formed part of the schedule are rectified in a reasonable time period (Klijn and Koppenjan, 2016). The rectification of these form of errors will result intro the final certificate of making good defects.


It can be summarised from the above project report that the performance of the overall contract depends on the technique chosen for completing it. The traditional methods are used in the completing this kind of contract will help an entity in order to conduct their overall proceedings which provides additional directions to this particular contract. This gives additional opportunities for the owner in order to reduce their overall cost of the project.

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