Overcoming 6 key issues for effective construction contract management

Construction contract management is one of the most “headache-inducing” issues for every contractor. According to experts from JICA (Japan International Cooperation Agency), there are 6 key issues that need to be addressed. If you can clearly understand and effectively resolve these issues, managing construction contracts will no longer be a challenge.

What are the 6 key issues in construction contract management?

To promote the quality and management of construction contracts between Vietnam & Japan, experts have identified 6 key issues that require significant improvement, including:

• Bidding documents at the time of bidding and contract documents at the time of signing.
• Clauses regarding instructions and decisions.
• Evaluation procedures for arising/changed/adjusted work and extensions of the completion time.
• Standardization of the milestone payment process.
• Inspection of acceptance work by state management agencies.
• Assessment of construction defects.

Let’s explore these issues in more detail with 1Office! From there, we can identify appropriate solutions.

Clarifying and detailing bidding documents

At the time of bidding, the bidding documents must contain the following complete information:

• Governing language
• Details of the performance bond
• Details of the contract advance
• Commencement date (including the site handover date)
• Construction period, payment deadlines
• Construction management responsibilities of the client
• Details on the inspection procedures for acceptance by state management agencies and agreement on contract bonuses and penalties

During the bidding process, contractors are allowed to request clarification of the bidding documents. The contract documents do not include minutes of negotiation, adjustments, or additions to the contract (if any).

Instruction and decision clauses

Regarding the clauses, the client’s opinions must be clearly stipulated in the contract template. The contractor must then comply with any instructions given by the client. The most important issue here is that the client and the construction supervisor must reach an agreement.

Evaluation procedures for arising issues

According to Vietnamese regulations, when any issue arises, the client and the contractor need to discuss the violations. This allows both parties to adjust the price and implementation schedule accordingly.

In cases where it is necessary to accelerate the project’s progress, the client can discuss with the contractor to plan out tasks and strategies and propose suitable solutions.

Standardizing the payment process

The payment process needs to be clearly and detailedly regulated from the moment the contract is signed. And the price for any arising work must be agreed upon.

In cases where the two parties cannot agree on the scope of work and the price for payment, the payment will be provisionally calculated at the client’s request.

Inspection procedures for acceptance

After each project, the acceptance work is indispensable. So, what are the roles of the client and the contractor in this process?

Before acceptance, the implementing agency must announce the inspection request. The inspection content must be sent before the inspection is carried out. The inspection takes place upon completion of a phase or the entire project. The items to be inspected are in addition to the contractual requirements.

Assessing construction defects

When the project is completed, the supervisor also needs to assess any defects. Because construction defects can arise from many causes, it is very difficult to determine who is responsible. Therefore, an independent council of experts is needed to ensure objectivity when performing this task. The council will be convened when major and difficult-to-assess defects occur.

Why use software to support construction contract management

Many contractors think that the construction industry doesn’t need to use management software. However, this software provides significant support and benefits to both contractors and the construction handover party by synchronizing documents, controlling content, and tracking work progress and project quality. 

Explore 1Office Construction Contract Management Software

With its strength as the software with the best synchronization capabilities available today, 1Office construction contract management software helps businesses: 

Manage Workflows

– Easily set up and declare steps in the workflow using available templates.

– Define and 100% digitize all types of workflows.

– Automatically assign tasks based on position and departmental function.

– Real-time work progress reports with quick updates.

– Set up automatic alerts to ensure work progress.

– Easily create and share work documents directly within the workflow.

Manage Project Materials

– Manage budgets, forecast profit/loss for each project.

– Accurate and timely information on the project’s cash flow status.

– Manage project finances down to each receipt, payment voucher, and purchase order.

– Strict material import/export processes to prevent losses.

– Update payment/cost/advance information quickly and accurately.

– Control internal cash flow. 

Intuitive and Scientific Reporting and Evaluation System

– Report and update work progress and results in real-time, on a 5-level scale: Poor, Average, Fair, Good, Excellent.

– Detailed reporting system helps evaluate the performance of individuals, units, departments, and projects.

– Intuitive and scientific Dashboard screen with multiple views: List, Gantt chart, Calendar, Kanban.

And many other utilities:

– Digital Signature Integration: Suitable for the current trend of electronic transactions, while also expanding choices for businesses.

– Automatic Synchronization: Timesheet data from all sources (fingerprint scanners, computers, phones, etc.), KPI data, and personnel information with the payroll.

– Automatic Alerts: Set up unlimited automatic work alerts. The automatic reporting system supports building any report template.

– Resource Template Library: Resource system: Sample workflows, sample reports, and forms designed to be diverse, professional, and suitable for any business.

– Integration and Expansion:  The Open API system allows for easy integration and expansion with other software

– Flexible Workflow Design: Simple and easy-to-use management tasks, meeting the diverse needs of most businesses according to their specific characteristics

– Multi-platform Support: Use on various platforms from Mobile/Laptop/PC/Tablet.

For any inquiries about construction contract management, please contact us via hotline 088 610 1010 or register here: