The next step: when project controls and contract management meet

AfiTaC experts create synergies between project controls and contract management services

“Afitac provides contract management services to clients in the project businesses. We work for Project Owners, Contractors and Engineers/Contract Administrators. Therefore, we strive to keep a balanced approach between the parties and to avoid disputes thanks to transparency, open communication and anticipation. To achieve this, we need to rely on excellent project records, which are the result of solid project controls.”

Jan Bouckaert, managing director AfiTaC SAS

Both project controls and contract management are needed on complex and large-scale projects; they share similar objectives and values. Both should favor long-term relationships and focus on adding value to projects. Their shared values are all about professionality, integrity and constructive collaboration. The different angle by which they address project challenges is where the true synergy lies. Project Controls provide analytical methods. Contract Management deals with contractual aspects in all project phases.

Change control: one of the links between project controls and contract management

One obvious place where contract management and project controls meet, is change control:

A project schedule is a model of the project developed through Project Controls. Such a model is subject to change and the same applies for the budget. With project controls procedures, techniques and tools we identify, measure and classify changes. Change can occur at different levels (see image below) and we consider a level 2 change to impact the contractual boundaries time, cost, scope and/or risk.

We advocate for an integral project controls and contract management approach in which those elements are linked. Project controls professionals analyze the impact of change on schedule and budget. Contract management then deals with the contractual implications of such change and safeguards each party’s rights under the contract.

How do we align project controls and contract management?

Both contract management and project controls require setting out a strategy. Aligning their strategies is crucial for project success. Recent developments in both worlds show an increased focus on collaboration (which can be one of the foundations of a chosen strategy). Modern contracts seek NOT to ambush the other contracting parties and use simpler structure and terminology with less unnecessary references between clauses. Also risk allocation is done early in the process and to the party that is best position to manage the risk. Standard contracts, like FIDIC (Int’l), NEC 4 (UK) and UAV (NL), are a step in that direction.

In that same sense, we promote project controls’ strategies that are about transparency and open communication. We do this by implementing techniques and tools that adhere to this philosophy, encouraging interaction between the parties at all levels (to avoid unnecessary escalation of disputes). Project management and the contract should facilitate this.

A simple example to clarify this is about the choice for a lump sum or cost-plus contract. The selected project controls’ strategy should follow this choice. For a lump sum contract, the employer should be less focused on the close follow up of the books of the contractor. This has consequences for cost control methods and progress monitoring (f.e. through earned value management). If a cost-plus contract is chosen, strong alignment between project controls procedures (and techniques and tool-implementation) should be established between the contracting parties. If this is not done carefully, you might end up in exhausting discussions.

Next-level project controls and contract management on your project!

The challenges faced by (mega)projects these days are daunting. We recommend you to involve experienced and skilled professionals to support you with what they are best at. We are able to support you in the related domains of project controls and contract management.  Reach out to our experts for advice. They are happy to share their knowledge and experience with you. Rely on our Academies to increase your staff’s awareness of project controls and contract management or ask for in-depth training on a specific subject. Entrust your operations to our teams by having one or more of our engineers strengthen your project-team.

Together we can make your project a success!