5 Key Elements of the Client / Contractor Relationship

The success of a project depends heavily on the Client and Contractor relationship, whether it’s setting a clear scope of work, agreeing a reasonable timeframe for completion, and ultimately the costs and payment terms.

When taking into consideration applicable legislation e.g., the Construction Design and Management Regulations (CDM), and in the interest of avoiding compliance issues and contractual disputes, we believe that there are 5 elements that all Client and Contractor relationships need for a successful project.

1. Transparency & Openness

This might sound obvious and maybe in some cases a little bit naïve but being clear about what you want to achieve from a project as a Client and explaining what is achievable from a Contractor perspective allows for reasonable time, cost, and resource planning on all sides.

As well as telling the Contractor what they want, the Client must also supply all applicable information (pre-construction information) such as:

  • site access arrangements
  • site hazards and hazardous areas
  • technical plans and drawings
  • emergency arrangements.

The more information that that Contractor has during the planning and design phase the greater the opportunity to prepare.

In accordance with CDM every Client must provide sufficient time for a project to be completed. For Asset Owners & Operators, this might mean planning for ‘Outages’ or for more conventional construction Clients simply a timeframe for when they take ownership of a new build.

Either way, it is vitally important that the competent Contractor is very clear about what is achievable, allowing enough time (and contingent time) so as not to create undue risks to safety, quality, and the environment.

Even in instances where both parties have agreed what is achievable, a research report commissioned by the Health and Safety executive (RR462 – Client/contractor relationships in managing health and safety on projects) also found that an open and honest relationship leads to more willingness to admit mistakes (e.g. near-misses, non-conformances) and a encourages a no-blame culture which in turn can lead to H&S problems being spotted more quickly.

In short, expectations should be managed, and all available information (including previous lessons learned) must be shared to get both the relationship and the project off on the right foot – and of course importantly, comply with legislation.

2. Clear Roles & Responsibilities

 Assigning clear roles and responsibilities ensures that all key project activities are managed, monitored, and most importantly undertaken by competent people and/or organisations.

From a CDM perspective it is important to understand that the Client retains most of the key roles listed below until such time as they formally appoint (in writing) a competent contractor to undertake a role on their behalf. Once a competent contractor has been appointed, it is important to agree who is taking each role and what is needed/expected from each: 

  • Client
  • Principal Designer
  • Principal Contractor
  • Competent Person
  • Temporary Works Coordinators

As an example, a Client who fails or chooses not to formally appoint a competent Principal Contractor must take on the responsibility of coordinating all construction related activities and prepare and maintain the Construction Phase (Health and Safety) Plan (CPP).

Equally, a competent Contractor who is appointed as Principal Designer and/or Principal Contractor should make the Client aware of their responsibilities under CDM.

To clearly identify Roles and Responsibilities during the project planning phase, many organisations find it useful to produce a matrix which identifies all of the key activities and with agreement from all parties, assigns specific tasks to organisations and/or individuals.

3. Agreed Ways of Working

Assigning Policies, Procedures, and Processes set the expectations and standards required by an organisation to effectively and efficiently deliver a product or service. Most if not all organisations follow a clear set of rules on how they operate, and when you bring multiple companies together there are inevitably going to be differences however discrete.

With this in mind, it’s important to agree and align polices and processes at the outset. During the tender stage of a project, the Client will generally seek to understand the fundamental elements of potential Contractors management systems. Any tender or offer of work should include the Client’s expectation of what processes will be adopted, and the respective Contractor needs to consider the potential impact of this on their own management systems.

Due Diligence and Assurance activities (audits and inspections) are needed to provide the confidence that agreed ways of working have been fully implemented and are being complied with. The approach to this should be a collaborative one between the Client and Contractor, conducting joint site visits alongside the contractors daily and/or weekly inspections.

Sharing the findings of audits and inspections and then agreeing actions provides an open forum for continual improvement and compliance monitoring. This is where it is vital to have an effective means of setting and communicating scope (sometimes referred to a ‘terms of reference’), recording findings, collecting evidence of good and not-so-good practices, and communicating the results.

Having robust processes and procedures is one thing, but effective communication and implementation of what is required can be the difference between compliance and non-compliance with policy and/or in most cases legislation.

4. Change Management 

 For more complex projects there is a high likelihood that changes however minor will occur, and the importance of agreeing the process for making changes during a project should not be overlooked. Whether it’s a change that could impact time, cost, or quality (which could also result in health, safety, or environmental impacts) all parties should be very clear about how and when the change management process needs to be initiated.

Disputes due to a lack of, or poor execution of processes for making changes to scope of works or standards and specifications are fairly common in most projects (large and small). To ensure that disputes are kept to a minimum it is important to agree during project bid or project planning phase what the process will be and also the key roles and responsibilities.

The final piece of the puzzle for managing change is tracking and evidencing actual changes, and communication of applicable information to all interested parties – taking into consideration the impacts of changes to design.

5. Success Factors 

So, as a Client you know what you want and from the Contractor’s perspective you know what you need to do, but how do you measure the success of the project (or parts thereof).

Setting detailed criteria, providing clearer visibility of project success factors, and agreeing the process for ‘singing-off’ on key milestones at the outset is key to all parties understanding the deliverables of project and support the development of a positive and collaborative relationship.

Disputes can often arise between Clients and Contractors when what a completion of a project or element of a project is interpreted differently by each party. This can have a cost and quality impact for Clients and Contractors alike.

Documenting project milestones (typically set by the Client in consultation with the main contractor) provides clear measures of success through to project completion. It is important that all parties are aware of and understand the ‘success factors’ to ensure that everyone is striving for the same outcome at each stage.

To enable the confirmation and sign-off when project activities have been completed, again evidence is key. The ability for a Contractor to provide evidence and get the Client to acknowledge completion of an activities through documentation and image gathering can be the most effective way to achieve sign-off of project milestones.

Next Steps 

If you are keen to standard some or all of the key elements listed above, why not speak to our of our team today to find out how RIskd can help you optimise your relationships and demonstrate compliance?

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