POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

OPEN UNIVERSITY SYSTEM

MASTER OF SCIENCE IN CONSTRUCTION MANAGEMENT

CM 652 CONSTRUCTION CONTRACT ADMINISTRATION

CLOSEOUT/CLOSURE: LEGAL DOCUMENT COMPLIANCE

Group No. 4

Submitted by:
Manalo, Katrine Gay L.

Submitted to:

DR. LUTZ REYES

Course Specialist

2018

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1. DETAILS OF THE REPORT:

Contract administration involves making decisions and the timely flow of information and
decisions to enable completion of the project as required by the contract documents
including review and observation of the construction project (Construction Specifications
Canada). In contract administration, administration plan is done prior monitoring
performance during the project execution.

The key contract administration activities typically include:

 Ensuring compliance with contract terms and conditions;
 Practicing effective communication and control;
 Managing contract changes, accounting, invoicing, and payment;
 Management of government property;
 Resolving claims and disputes; and
 Contract closeout actions.

From the six (6) above-mentioned activities, contract closeout actions or closure of a project
plays an important part in every project review.

Contract closeout or closure verifies all the administrative matters are concluded on a
contract that is physically completely done. This means that the Contractor has delivered all
the requirements (materials and/or services) all in accordance with the contract and
Government Laws and the Buyer/Client approved and accepted the completed work/s.

One of the aspects of the contract closeout or closure that must be reviewed and/or
observed is the legal document compliance of the Contractor.

A legal document is any document which is enforceable by law. In construction, there is a

construction law wherein regulates not only building codes and disputes with contractors.
Construction law is a vast area of law that can involve matters related to contract
interpretation, consumer expectations, and even how to select the best contractor for the
best price for your client's business. Whether you represent a design professional, architect,
development group, or engineer, as a construction lawyer you should be familiar with labor
laws, administrative laws, and occupational health and safety regulations in area where the
project will be built.

The common legal document used in execution of a construction project is the construction
contract documents. The construction contract documents comprised the owner-contractor
agreement, conditions of the contract, plans, drawings, specifications, addenda,

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modifications and changes, together with any other items stipulated as being specifically
included. These are written documents that define the roles, responsibilities, and “Work”
under the construction contract, and are legally-binding on the parties (Owner and
Contractor).

Below are the commonly comprised of a construction contract:

 Owner-Contractor Agreement – Defined the individual documents that constitute
the construction contract document.
 Conditions of the Contract – The part of the contract that constitutes the basic terms
between the Owner and the Contractor. This sets forth in detail the Contractor's
basic duties and responsibilities and covers such areas as bonds and insurance;
progress and final payments; substantial completion; status of the engineer during
construction; owner's responsibilities; subsurface and hidden site conditions;
changes in the work, contract price, or contract time; Contractor warranties and
guarantees; correction or rejection of defective work; work suspension or
termination; and dispute resolution.
 Plans and Drawings – The part of the contract that graphically shows the scope,
extent, and character of the work to be performed by Contractor.
 Specifications – The part of the contract that consists of written requirements for
materials, equipment, systems, standards, and workmanship as applied to the work,
and certain administrative requirements and procedural matters applicable to the
work.
 Bidding Documents – The bidding requirements, the proposed contract documents,
and all addenda.
 Bidding Requirements – The advertisement or invitation to bid, Instructions to
Bidders, Bid Bond or other Bid security, if any, the Bid Form, and the Bid with any
attachments.

“Contract Documents” is different from “Bidding Documents”. Contract documents are

those items so designated in the agreement, and which together comprise the contract.
While, the bidding documents are part of contract documents wherein the bidding
requirements, the proposed contract documents and all addenda are stated.

Moreover, in achieving a properly monitored legal documents, below are the best practices
that may apply:
 Store all legal contracts in a central repository
This will avoid or eliminate any chance of lost documents.

 Standardize your legal contract templates

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 Use standard templates that are up-to-date. These templates should be updated
every quarter or so to make sure that all the regulations and clauses are up to date.
Missing a regulation update is one of the risks we discussed, and can lead to some
serious financial risks.

 Standardize the contract negotiation process

Create a step-by-step process for the negotiating of a contract, and make sure you
stick to that process. With this standardization, non-lawyers can follow the steps and
handle standard agreements without too much help from a legal team member.

 Build compliance management in the contract process

Adding a step to the contract process where all compliance regulations are checked
and double-checked is a great way to mitigate risk.

Concluding the above, proper monitoring the legal document compliance of both
contracting parties (Owner and Contractor) is very important in a project closeout/closure
activity. This will review the compliance of both contracting parties in their agreed contract
prior settlement of final payment of the Contractor. Furthermore, this will assess if the
Owner will approve and accept the completed works of the Contractor based on the
requirements of the agreed contract and contract conditions. It is not only the Contractor
that must comply in the contract agreement, it should be both Owner and Contractor. In
this, it will avoid dispute and legal actions once and/or while still bonded in a contract.

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2. REFERENCES:

Construction Specifications Canada. Construction Contract Administration. Retrieved from

http://csc-dcc.ca/Education/Construction+Contract+Administration/.

Lynch, Jorge. Contract Administration Basics. Retrieved from

https://procurementclassroom.com/contract-administration-basics/.

Project Management Institute , Inc. (2008). A Guide to the Project Management Body of
Knowledge (PMBOK® Guide) Fourth Edition.

Project Management Professional (PMP). Closing a Project or Phase. Retrieved from

https://www.greycampus.com/opencampus/project-management-
professional/closing-a-project-or-phase.

Team SpringCM. Legal Contract Management: 4 Best Practices. Retrieved from

https://www.springcm.com/blog/legal-contract-management-4-best-practices.

The Law Dictionary. What is CONTRACT ADMINISTRATION?. Retrieved from

https://thelawdictionary.org/contract-administration/.

The University of Texas at Dallas (2017). Contract Management Handbook. Retrieved from
https://www.utdallas.edu/contract/files/Contract-Management-Handbook-Final-
01.25.2017.pdf.

US Legal, Inc. (1997 – 2016). Construction Contract Documents Law and Legal Definition.
Retrieved from https://definitions.uslegal.com/c/construction-contract-documents/.

Yelton, Linda (2014, October 1). What are the Construction “Contract Documents”?. Retrieved from
https://www.ejcdc.org/construction-contract-documents/.

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