The board has recently decided that the roads within your housing complex need to be repaved. As a resident and member of the board, you’re very unfamiliar with how the process works. Board members are discussing engineering terms and bids and contract administrators. And, to be frank, you sit silently in the meeting asking yourself “What even is contract administration?”
Matthew Grobert, Senior Project Manager with The Falcon Group, an engineering, architecture and energy consulting firm in Bridgewater, New Jersey, explained that a contract administrator provides condominium and homeowners associations with leadership to ensure their projects are completed within the agreed terms, on time and within budget. This includes projects such as paving, roof or deck replacement, and any other capital replacement project.
“Contract administration is the process of managing all aspects of a contract from the time it is signed to the completion of the project the contract is for,” said Grobert, “most often, the engineering firm for the community fills this role.”
In cases where a community does not already have a firm however, the process begins with a pre-bid meeting. During this time, the requirements of the project, including the scope of work, are discussed to ensure each firm understands every aspect of the project so when the bids are placed, they are, as Grobert said, “apples to apples.” Next, each firm drafts a set of bidding documents, which include design and specifications. This process may take firms about 60 days to complete, as it requires site inspections.
Once the bids are received, this is where Grobert, as the contract administrator, comes in. The contract adminstrator is responsible for reviewing the bids, providing the board with a comparison as well as any clarifications in order to assist with their decision-making. “Sometimes, with larger jobs, the administrator will arrange interviews between the board and the bidder they are potentially interested in using for the project, and act as a liaison at the interviews to handle technical questions,” Grobert described.
Likewise, the contract administrator is responsible for maintaining clear communication between all parties involved within a project. This includes monitoring the progress of the project, scheduling, quality control, reviewing and approving invoices, adhering to all legal aspects, and documenting work with field notes and photographs to ensure that the work is being performed as per the designs and specifications.
If an unforeseen issue arises, a change order, or change to the contract, may be made, but must include details of that change: time, materials, and cost. The change order will then be either modified or approved by the contract administrator, and if a dispute arises between any party, it will be handled by the contract administrator as well.
For associations not using an engineer for a project, all of the liability is assumed by board if any problems occur. An engineer is trained to oversee the engineering functions necessary for a board to fulfill its responsibilities in keeping a community’s common elements functioning as they are intended, to maintain property values and insure the safety of the residents in a fiscally responsible manner. “Hiring an engineer provides a third party, protecting the association and management company,” said Grobert. “With most large projects, building permits are required, and in order to obtain a permit, designs and specifications prepared by a licensed engineer must be provided to the municipality before they will issue a construction permit.”
During construction, if any resident has questions about the work being done, Grobert said they should contact the board or association manager. Generally, they will provide notice should a resident’s property be affected by the project.
At the project’s completion, all parties will do a final inspection and produce a punch list, or document listing any work that does not conform to the project’s specifications. Lastly, those items must be closed out before final payment is made.
The fees charged by the project administrator vary depending on the size of the project and the amount of oversight needed. Usually, the fee is a percentage of the project’s total cost.