Contractor Administrator

Administrator and other Roles

Building and engineering contracts of any significant scale, provide for the appointment of an architect, engineer, or other professionals to administer the contract.  In the context of building contracts, an architect usually administers the contract.  Architects are commonly appointed under standard RIAI terms of engagement.  His obligation is not to be on the site constantly but to make such visits as are reasonably necessary.

In engineering and other contracts, an engineer may be the administrator. Commonly the person who is the contractor administer has designed the work.  This is not necessarily so, however.

The contract administrator generally has power under the contract to bind the employer in respect of certain matters.  The agency is generally restricted to the scope of the contract itself unless there are specific circumstances to otherwise indicate. General principles of the law of agency apply outside the scope of specific authority granted by the contract.

Standard forms of building contracts may allow for the appointment of persons to roles such as project managers, supervisors, quantity surveyors, site inspectors or clerks of works.  They may be appointed by the employer after consulting with the contract administrator.

An employer may wish to appoint a clerk or works as a site inspector who is onsite to act on behalf of the contractor administer on an ongoing and permanent basis. Matters of detail are generally within the scope of the clerk of work’s responsibility while the architect was more responsible for more general design matters.

Powers and Duties

Contract administrators are usually given power under standard contracts to give instructions to the contractors in various contexts.  This recognises the complexity and potential for change and adaptation that may occur in the course of a contract.  Under some contracts, the employer must justify the instruction with reference to a particular power if requested.  The effect of an extension may be to entitle the contractor to more time and additional payment.

Standard contracts generally give the administrator power to order the suspension of works in limited circumstances. However, an unjustified order may cause the employer to be in breach of contract. If the reason linked to the suspension is due to the contractor’s fault, it will not be entitled to compensation.  However if it is not so linked, then a right of compensation will arise under standard contracts.

The contractor administrator owes a  duty of care to the employer.  He may be liable for damages for breach.  He may advise the employer on a professional basis.  The duty of care will range across his functions from design advice and contract administration. He will commonly have duties to explain the rights and obligations of the parties under the building agreement.

The contract administrator’s obligations to inform the contractor cover a range of matters.  It must give them the contract documents.  Generally, he must give further information as is necessary to complete the works under standard terms.

Inspecting the Works

The contract administrator is entitled to inspect all works.  Works is generally be executed to the administrator’s reasonable satisfaction.

The contractor may carry out tests of any materials or work.  If the work is defective the cost of the tests and reinstating, is to the account of the contractor.  If there are no defects the contractor must be paid the cost of opening and making good the works,  as if it was a variation.

The contract administrator may owe a duty of care and skill to discover defects in the work and bad workmanship.  However, this is limited to the extent of his inspections and it does not follow that he is responsible for all defects. He may be liable for those which he might reasonably have discovered with due care and skill.

The contract administrator has a second role in which he must act as an independent party.  He has important decision-making powers in relation to the issue of certificates.  He must exercise due care and skill relative to the standards of his profession.  In this context, he must act independently of the employer and contractor.

Certificates

The most common forms certificates are those certifying works that have been done and the payments due.  Architects will issue interim certificates under most employment contracts at fixed intervals.

The valuation of the interim certificate is often based on the quantity surveyor’s measure of the works done. At the end of the works, a final certificate is issued.  After the end of the defects liability period, a further and final certificate is issued.

Certificates may record certain key events and decisions under the contract.  Confirmation and certification of those events may be preconditions to certain matters including entitlement sot payments or extensions of time.

Certificates are commonly conclusive in relation to the matters certified. In other contexts, they are binding but not absolutely conclusive.  Final certificates are generally conclusive.  Contracts may deem certificates including in particular, the final certificate to be conclusive in certain matters.  In other cases, certificates may be opened up and charged on adjudication, arbitration, or litigation.

The fact that the certificate is conclusive in relation to substantive contents does not mean that it is unchallengeable for all purposes.  It may not be properly issued under the contract, where for example, there are elements of fraud, improper pressure or influence.

It was formerly held that in issuing certificates the contract administrator was acting in a quasi-judicial manner.  It followed from this, that he was immune from legal suit in the same manner as an arbitrator or a  judge.  However, the principles were overturned by the UK courts in the 1970s.  The House of Lords held that in principle, there might be a duty of care by a certifier to the parties, in particular to the employer.

Cases later departed from the principle that the contract administrator might be liable to the contractor. The English courts held that it would be unjust and unreasonable to impose a duty of care on the engineer or administrator in these circumstances.