Contract Management is defined as a set of techniques, processes, and best practices that accompany the entire life cycle of a construction project to ensure that the agreed-upon deadlines, costs, scope, and quality are met. In a construction , contract monitoring is essential to reduce uncertainty and provide the necessary clarity for decision-making at any stage of the contract.

The goal of Preventive Contract Management is to transform a static contract into a functional and efficient partnership by anticipating and clarifying future situations. This approach contrasts with the old contract management, which was reactive and resulted in increased liabilities, reduced profitability, and strained relationships between the parties.

To ensure successful contract monitoring complex construction

1. Focus on the Contractual Three-Dimension: Area, Price, and Project

Contract monitoring should focus on the essential aspects that define the conditions for the execution of a project: Area, Price, and Design . Variations in these three areas are the main causes of claims .

The Client is obligated to guarantee the conditions for execution, which includes:

1. Physical Order (Area): Guarantee free and unimpeded access to the construction areas. Failure to clear an area, for example, is a systemic impact that can affect the entire project.
2. Technical Order (Project): construction- ready designs . Design inconsistencies or delays in delivery are common causes of deviations.
3. Economic Order (Price): Ensure that agreed-upon prices are maintained, or that there is provision for new items and additional services.

Systematic and periodic monitoring of these obligations is crucial because, if they are not met, the project cannot be completed on time and with the agreed resources.

2. Management of Qualified and Integrated Records

The record should not be viewed merely as a "loose note" or a routine report. It needs to be solid contractual evidence .

Avoiding the Fetish of Records (RDO)

The Daily Work Report (RDO) is a basic record-keeping tool, but it should not be considered the most important document of the project. The RDO is not a "credit book". Contract management should avoid creating a "record-keeping war zone," which occurs when an excess or lack of objectivity leads to prolonged discussions, hindering the reconstruction of the project's history.

Characteristics of an Effective Record

For the record to be effective and allow for subsequent billing, it must be:

• Objective: Use nouns, action verbs, and objects. Avoid adjectives or emotions, thus avoiding unnecessary collateral writing.
• Detailed: Include description, quantity, time, cause, and impact.
• Connected: Interact with other project documents, such as schedules, measurements, spreadsheets, and minutes.

Recording Systemic Facts

One-off events (such as a brief access restriction) can be resolved with a detailed Daily Work Report (DWR). However, systemic issues (such as recurring delays in project or area release) require a chain of records that descend through the recording layers (Dultra's pyramid), moving from the DWR to more technical documents.

• Technical Consultations (TC) or Change Requests (CR): These should be issued when design errors or inconsistencies are identified.
• Master Project List: Essential for tracking delivery dates and revisions, providing delay alerts to the Client.
• Topographic Reports or Area Release Terms: Documents that record the exact date of release of a base or front.
• Schedule: The systemic impact should be incorporated into the schedule, linking the project or area delay as a predecessor activity, which automatically generates an impacted schedule.

3. Continuous Analysis of Indicators and Anticipation of Problems

Contract monitoring is based on the constant comparison between the contracted scenario and the actual scenario. This comparison involves the analysis of key indicators, such as:

• Physical Progress (Predicted vs. Actual).
• Revenue Growth (Forecast vs. Actual).
• Resource Allocation (Direct labor, indirect labor, and equipment).
• Productivity (Contracted vs. Actual).

Analyzing these indicators helps to detect deviations quickly and to clearly assess the impacts on cost and schedule. For example, it is necessary to check if mobilization is high but production is not keeping pace, or if productivity has fallen even with increased resources.

Contract administration should be the "guiding thread capable of anticipating and clarifying the future," using these controls to predict whether a problem will occur. This approach allows the Contractor to make strategic decisions, such as sending a technical letter regarding the lack of area clearance, documenting the problem and requesting formal guidance, instead of immediately resorting to aggressive notifications that could deteriorate the relationship.

contract monitoring strategies construction companies can ensure continued profitability, contract compliance, and the preservation of client relationships.

Master Contract Monitoring in Construction: Launch of the Exxata Contract Administration Course

Tired of the uncertainties and conflicts that eat away at your profits? Contract management cannot be reactive, resulting in strained relationships and reduced profitability. It must be preventative .

Exxata a consulting firm specializing in the management of complex problems and conflict resolution, and recognized as the largest contract administration company in Brazil , has just launched a course that will transform your career: the Contract Administration Course .

This course is ideal for technical and legal professionals who want to master the intricacies of contracts and work with greater authority on high-level projects .

You will be trained to ensure contractual, technical, and economic security in infrastructure and electromechanical assembly projects.

If you want to grow in your technical or managerial career and ensure well-managed contracts from start to finish, this is your opportunity!

Secure your spot now! Registration is for a limited time only. You'll get immediate access to the course for an affordable price, directly through the Hotmart platform.