construction contract

Construction Contract Administration Services

Q: I feel that there is more risk doing contract administration services. Am I better off avoiding providing that service?

A: There is no indication that providing construction contract administration services (CA), if done properly by properly trained staff, is any risker than any other phase of professional services. Claims do and can arise from any phase of professional services. A concept or schematic design package that does not take into account the property setbacks or other code requirement that may affect the total buildable area, may cost a developer millions of dollars. If the developer is not able to build and lease or sell as much square footage that the concept or schematic design package indicated which may lead to a claim of professional negligence. A missed or poorly designed flashing detail during production of construction documents can result in substantial property damage and cost. Who is in a better position to observe and evaluate the construction process, respond to questions, evaluate the effects of a proposed or required changes, and the other activities many design professionals provide when administrating the contract for construction? The design professional that prepared the construction documents and knows and understands the thought process behind each decision? Or another entity that may have to make assumptions, which can be incorrect, as to the reasoning behind key design decisions? CA is an important service a design professional can provide that is a benefit not only to the design professional’s client but also to the construction team as well. Some argue that CA is a way of managing the risk of a project for the owner as well as the design and construction teams. Firms that have adequate and properly trained staff and have been properly compensated are likely in a better position if they provide full professional services including services related to administrating the contract for construction.