Contract Control International

(from the Contractor’s Perspective)

To begin with is important to identified the role and principal characteristics a Superintendent must have to deliver successful projects. The Super is the person in charge to perform the role of an independent contract administrator and administer in accordance with the drawings and specifications, under the umbrella of the contract conditions. It is also an intermediate party between the owner or principal, the designer, and the contractor. One of his most important responsibilities is “the duty of fairness” which means it needs to take the role with impartiality, fairness, and honesty. Moreover, the super needs to have appropriate technical knowledge, experience, and skill in undertaking this role.

This is an extremely important role to the project outcome. A Superintendent with poor reputation (Amongst Contractors) can and do cause less keenly priced tenders, for that reason the position selection requires special care.

Superintendents need touse their knowledge to deliver engineering inputs, appropriate contractual understanding, accurate communication, good negotiation skills, ability to be decisive, recognise the importance of timelines of all decisions and its impacts, establishing an appropriate level of trust between the key positions of the project: principal, designer and contractor and maintaining good working relationships on and off site.

This position carries on a level of authority stipulated in the contract, that need to be clearly understand. Regarding the “Duty of Fairness” many superintendents do a good job in these respects. However, others are prone to shortcomings in these areas. This is not entirely surprising given the following inherent difficulties or conflicts of interest:

• AS2124 and AS4000 recognise that the superintendent has these conflicting duties. Clause 23 of AS 2124-1992 requires the principal to ensure that the superintendent is honest, fair, diligent, and reasonable.
• Similarly, clause 20 of AS 4000-1997 requires The Principal to ensure that the Superintendent fulfil all aspects of the role and functions reasonable and in good faith
• The Principal may directly employ the Superintendent

As an example: The Superintendent may be the designer in this case it can be over protective with the design unwilling to entertain alternatives, unwilling to allow improvements upon their design or inefficiencies to be highlighted to the principal. This can cost the client in lost savings. It may also be protective of design errors, unwilling to let the principal know about these and usually have tendency to leave problems with the contractor. Further potential problems that can corrupt impartiality, fairness and honesty are:

• A us/them attitude, can reflect a lack of trust and /or a desire to play games.
• Excessive desire to wield power and/or “feed” one’s ego
• An excessively conservative safe personality
• The Principal virtually always pays the Superintendent therefore the desire to prove their worth.

Focusing now in the Superintendents technical knowledge means they must have the ability to apply their knowledge and experience, need to be able to make sound engineering decisions, be able to take drawings and specifications as a sound technical base and then apply true engineering ingenuity and creative solving problem skills and more importantly always achieve best possible results not only standardised results.

In addition, appropriate contractual understanding is a key factor in the development of a superintendent career, to achieve this a good working knowledge of the contract condition is required. Also, an effective escalation process must come into play in other words a system of requesting escalation of any given issue of disagreement up to the next level of authority, unresolved contractual issues can be very wasteful and dangerous in all sorts of ways including cost of course.

Overall, a superintendent must be impartial, fair, and honest, foster good working relationships, bring experience, skill and the right attitude towards the different situations that might arise on site, always be a good communicator, a negotiator, a decision maker and clearly understand their level of authority.

Under a roadwork’s or civil engineering contract, the ‘rules of the deal’ are set out in the various documents that comprise the contract including the letter of acceptance, contract conditions, scope of work, specifications, drawings and pricing and other schedules, etc.

The payment due to the Contractor is the by way of the lump sum or unit rates the parties agreed to when the contract was formed, plus any cost adjustments (additions or deductions) due and claimed under the terms of the contract.  Similarly, the date by which the Contractor has to complete the works is the agreed contractual date, but adjusted as claimed and allowed for under the terms of the contract.

The contract will specify the circumstances under which the Contractor can make a claim for increased costs for specified events arising during contract performance.  This may include changes to scope resulting in variation claims, and unforseen physical conditions resulting in latent condition claims.  Similarly the contract will specify the circumstances under which the Contractor may make a claim for an adjustment to the date for completion of the works.

As well as usually specifying the circumstances under which such claims can be made, the contract also often defines the processes the Contractor must follow in making such claims.

Thus the Contractor’s entitlement to make a claim for additional cost or time depends on the terms of the contract.  In making such claims, the Contractor is usually required in the first instance to notify the Principal of its intention to make such a claim.  This step may have a time limit on it, and failure to notify the Principal of its intention within the required time may result in the Contractor losing its right to make a subsequent claim.

The Contractor then needs to prepare and submit an appropriately particularised (enough details) and substantiated (enough proof) claim to properly ‘make out’ its claim.  Once submitted, the Principal or its representative (sometimes the Superintendent) assesses the claim, determines its value and advises the Contractor accordingly.  The Principal or its representative usually has the right to reject claims made outside contractually specified time limits; or a claim that is not adequately particularised and substantiated.

For Contractors to preserve their contractual rights to make such claims under the contract and to ensure their claims have a reasonable chance of success, there are three golden rules for contractors to follow:

1. Read, understand and follow the claim notification and submission processes specified in the contract;
2. Have a contract administration system that ensures adequate records are kept to support any claims that need to be made.
3. Ensure claims are properly formatted and made out and so as to be self-explanatory and self-supporting (i.e. adequately particularised and substantiated).

Some contractors don’t have the skills in-house or are too busy to follow these steps. Either way the result can be money is left ‘on the table’. An experienced claims consultants can assist in this process. Money can be saved if the consultant is prepared to guide and train the Contractor’s staff in claim identification, record keeping and claim preparation. But don’t wait too late as opportunity and entitlement can be lost.

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