Delay & Contract Management in Construction

In order to manage a project successfully, project management is very important because this will determine the quality, time, and expense of the project. The process of project management includes:
- Organizing, choosing, advising, and creating investment projects.
- Managing research and investigating projects;
- Analyzing data and evaluating projects;
- Constructing investment projects and profiles for designing the construction’s total estimates will be sent to authorities for approval.
- Signing economic contracts dealing with survey, design, construction, and installation.
- Supplying materials and equipment

The contract is really important since it is not only the basis of payment but also the basis of solving some legal problems. To get well-completed projects, all sides must have knowledge about the conditions of the contract. Managers are searching for the best ways to manage contracts more effectively. By doing so, the project will be more successful.

Mr. Ho Chi Linh made a on Administration Centre and Postgraduates Trainings at Can Tho University to find out the main factors that cause cost inflation, poor quality and delay at all stages of projects. These factors were analyzed in different ways of parties such as the Laws, Authorities, the Owners, the Contractors, Consultants, Sub-contractors. From that, the factors which are effective to prevent and control delays in the project can be seen.

The objectives of his study were to: (1) study the contract management practice of the case study project; (2) analyze the project management problems (time, cost, quality) in relation to contract administration; (3) identify delay causation in construction projects which were completed up to now or are building; and (4) make recommendation for improvement of the future project with similar characters.

Conclusion

Contract management is an important factor which directly affects projects. The contract management includes managing 3 main factors: quality, price and time. Most projects in Vietnam so far have been strongly influenced by these 3 factors, which leads to the poor quality, costs increases or delays. All these problems are popular and are still going on. However, it is possible for us to prevent even during the time the project is on going. With the total area of 18.990 square meters, 9 floors, the total cost is over 133 billion, the Administration and Post-Graduate Building – Can Tho University project is also affected by these factors.

This project was approved by the Ministry of Education and Training in 2008 and the investment was from the government budget. Although it has got supports and grants from the Government, relevant sectors as well as rector board from Can Tho University, the project was still delayed and the original estimated costs still increased due to objective and subjective reasons.

Objective reasons

Dramatic change in market price which affected workers and materials because the rate of price slipping was not specified in the contract.

There have been many problems in the transportation of materials and equipment because the construction site is located right in the center of the city which is very crowded with many students. The supply of materials was limited because of the fluctuation in the market price which significantly affected the progress and quality of the works.

Subjective reasons

The contract is not really logical, which does not express all the regulated contents that can tie the contractors as well as sub-contractors in materials, human sources and finance to implement the works.

The contractors did not provide with enough machines and modern equipment as regulated in the contracts. This is also due to the fact that the contractors selected were not well-qualified and have poor experience.
The contracts did not state clearly the time for the period of pile pressure and experiments, which does not include the time for implementation. This is the reason why the contractors often blame the experimental institutions for delays.

Solution

- Require the contractors to set up a quality management system suitable to project requirements
- Additional engineers, who have got experience about quality management and check equipment before being put into the work
- Contractor Material Supply who are responsible for the quality of their products
- Request the contractor to focus on human resources, equipment and time
- Providing a clear time for each job. Support the contractor to shorten the time.
- Investor has to set up the slippery of price coefficient.
- Having a strict and frequent monitoring, urge the contractors to solve any unexpected problems if occurred.
- Organizing frequent meetings with the contractors to remind and require them to commit and implement all the articles specified in the contract and follow the project timetable.
- Looking for sufficient extra financial sources to compromise slipping rate so as to assure the contractors to implement well with the rest of the project.

● Although there have been certain limitations, the contractors have successfully implemented some works for the project as well as strictly followed the procedure and legal documents. They did well with the work of environmental protection and guarantee the urban scenery, and especially the assurance of work safety. Therefore, there has been no accident in the construction site so far.

● Upon the completion of the project, it will significantly improve the prestige of Can Tho University in general as well as for the work of post-graduate training, scientific research and technology transfer, which promotes Can Tho University to a higher level in the region and in the whole country. This can help Can Tho University become comparable to other universities in the area as well as in the world. This also creates opportunities for the university managers to get access to and study with new technology thanks to good infrastructure because this is the first and biggest building in Can Tho University.

Recommendations

Due to the time as well as the limited scope of the thesis, not all aspects of the project were examined and analyzed. However, based on what has been achieved and not achieved, as mentioned in the conclusion, the following recommendations are proposed for better management to future projects.
- Contracts need to be more detailed with enough articles and regulations, in which all agreements need to be stated clearly.

- Trained engineers specializing in the fields of quality management and cost management.

- The investor should choose capable contractors with enough modern technical equipment as well as financial sources together with sufficient human resources.

- Bid winning price was not lower than the actual price of the project

- Build price fluctuation factor to deal with changing market prices.

- Utilize all funds to ensure implementation of the project.

- Checking materials, components, construction products through quality certificates where production and results of standard laboratory.

- Checking equipment and technology works before installation through quality certificates where production and results of quality testing of equipment.

- Need unified management of construction cost on a clue to avoid cross situation such as is now

- Complete the system of estimating construction

- Additional norms for construction and installation work is not yet in practice the detailed estimates of current, complete content and methods of synthesis unit set up in construction.

- List building , select a method of calculating overall cost consistent with the actual situation in the country, regional and international levels in each period.

His thesis abstract is copied and posted.

Abstarct

Since Vietnam joined the WTO, global platform for the construction industry were opened, bringing many new opportunities and also many difficulties and challenges. But in recent years, most of of projects are behind schedule, exceeding the estimate is very popular to make the management of the project have many difficulties, specially the management contract. In any investment project construction, the key elements necessary to ensure that the range or scope of the project, the total investment (Money) and the progress Time) of project implementation. Three elements make up a triangle project, including Scope - Money - Time is each edge of the triangle project. When an edge that will make these changes, the other edge changed. A project called good management when the triangle is less than the change triangle is created from investment projects approved construction. In fact the work of our building has been lost on the market at the home of their own, most projects are delayed and exceeded the total original investment to affect performance investment results as well as competitiveness.

The cause of the delayed and costs overcome, there are many such as institutional policy, in the uniform of the other central agencies and localities, these factors impact the world market, the capacity of entities involved in construction activities
This study will also discuss on the advantages and disadvantages of EPC contract from both Contractor and Project Company’s point of view and how to manage the EPC contract in accordance with term and condition clauses stipulated in the signed contract documents; how to resolve problems by understanding the contract clauses. However, the improvement of some major clauses are still needed in order to specify and define clearly the duties and responsibilities as well as obligations of involved parties to minimize the conflicts, interfaces, risks and disputes that can be happened during the project execution phase.