Think event, not document: what does this mean for contract administration?

Think event, not document: what does this mean for contract administration?

Why does the construction industry sometimes fall behind the curve of advances, becoming rooted in antiquated practices and processes that add little value?

One example of this, and the subject of this blog, is the ongoing obsession with documents in the construction industry. From digital copies of drawings and letters, through to template forms requiring physical wet signatures. Focusing on the document, or its electronic equivalent, results in bottlenecks and frustrations as the same deficiencies with physical documents is experienced in a digital world where modern construction professionals know that so much more can be achieved with technology.

Why does this document-centric world still exist?

As is common place in the construction industry (and others), the world of documents and documented processes is mostly used to provide a formal audit trail. It's simple and familiar to experienced professionals and it's also easy to print letters/templates/forms and pass information quickly between individuals.

In the world of contract administration there is often a contractual obligation on the parties to communicate and record events and matters in a documented form. For example, the NEC3 Contract requires changes to the Contract to be confirmed in writing and signed by the Parties whilst it also obligates both parties to communicate in a form which can be read, copied and recorded. It doesn't go as far as prescribing paper copies of communications, however for several decades the industry has continued to do what it's always done and write each other contractual letters.

Technology has disrupted this in recent years with document management systems being utilised to make those letters digital in their format. Loading templates and workflow around them has also brought a level of efficiency and consistency to the process that was often lacking previously. It's clear though that there's a revolution taking place in how data is captured, processed, presented and stored. The perfect storm of technological progress combined with professional development, industry knowledge and mandated requirements are feeding this digital revolution.

What does this mean for contract administration?

Clients and suppliers are right to treat contract administration differently to other functions that generate data. It's an entirely separate and all-encompassing function to the design, build and operate processes capturing information commonly maintained through collaborative BIM working. In changing the focus in contract administration away from documents and towards events, significant benefits arise in collaboration, granularity and integrity of data, and most importantly in the success rates of these projects. If we look at the NEC3 Contract it never talks about documents or letters, it doesn't mandate templates or forms of words to be used in communications. It simply sets out the obligations around dealing with events and the workflow relating to these events.

Therefore, it makes perfect sense when administering the Contract to focus on these events such as early warnings, compensation events, programme and design submission, and build knowledge around them. The document or letter should not become the focal point, it's only the audit trail of all this transferred knowledge.

A simple example is in the risk management provisions where an early warning may be notified by either party as they become aware of matters impacting on the project. The important bit here is not the letter being sent and the document transmittal paper trail that follows. It's the risk reduction process focusing on proposals, solutions and actions to mitigate these risks. It's the photos, mini-programmes, task trackers, sketches, notes from conversations on site or in corridors that all contribute to working collaboratively and overcoming these risks as a team.

Once contractual events are the focus and not the letters or documents then the knowledge captured provides a richness of data which is easily shared with other project control functions such as scheduling, cost and risk management. Suddenly the art of the possible allows price impacts from compensation events to be allocated to activity schedules, tagged to building model objects and transposed over digital representations of the built asset. Heat maps of early warnings could be generated alongside Defect tracking plans whilst all the time meeting contractual obligations.

All of this can only be achieved by utilising a proprietary contract management tool built around events and not documents. Created to capture knowledge of these events in ways that project teams may leverage with data in other applications. Click here to talk to us at about how we can unlock the potential in your contract administration process whilst preserving the contractual compliance and providing an audit trail- which if you must print, does look like a letter!
Author: Ben Walker, thinkproject UK

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