contract management
Project management in civil engineering, including construction projects, is among the most complex and challenging industrial projects worldwide due to factors such as technical and execution complexities, the variety of required specializations, the need for coordination between architectural, structural, and engineering phases, the vast amount of activities, and the multitude of individuals, organizations, and industries involved in a project. The importance of this issue is heightened by resource constraints, stringent regulatory requirements, and the critical importance of tight project schedules. As a result, innovative methods for project execution and management have been developed to better address these challenges. Among these, the Management Contracting (MC) method has long been recognized as an effective and coordinated solution that aligns with the overarching goals of construction projects.
Advantages of the Management Contracting Method:
1.If the management contractor is involved from the beginning of the design phase, they can coordinate with the design team to incorporate construction experience into the designs. This leads to reduced time, cost, and improved execution of the plans.
2.Since the management contractor oversees the execution of the construction work, there is no need for supervisory services from consulting engineers.
3.The presence of the management contractor facilitates coordination among construction contractors and resolves issues related to work interference. Providing support services to construction contractors accelerates the execution process and addresses their weaknesses.
4.The management contractor, as a member of the client’s team, does not have profit-driven motives and aims solely to satisfy the client and secure future collaborations on upcoming projects.
5.Since the management contractor awards the construction contracts, all risks associated with the construction operations are transferred to the management contractor, and the responsibility for the accuracy of the execution is held by a single contractor.
6.The management contractor’s fee is paid progressively and simultaneously with the project execution costs, which brings significant benefits to the client.
7.Since reducing project duration directly benefits the management contractor (as their fee is independent of project time), the management contractor will make extensive efforts to avoid delays in the execution of activities, leading to the completion of the project in the shortest possible time.
The Management Contracting Method Benefits Both Parties
On the other hand, the contractor (management contractor) does not use their own capital for execution and does not assume the financial obligations of subcontractors. They receive a fee based solely on their expertise in management, calculated as a percentage of the total costs.In summary, under the management contracting method, the client appoints a construction company to manage a project. This company, known as the management contractor, is responsible for determining project execution methods, organizing the project structure, and hiring personnel. The management contractor receives a percentage of the costs incurred for materials and project execution as their fee. This method benefits both parties:Firstly, the client does not pay any overhead costs to the contractor and only covers the costs of materials, labor, and machinery, which results in savings on contract costs.
