Although Construction Contract Management has become a state-of-the-art, this concept remains tentatively new to practitioners in Vietnam.
Most believing that managing a construction contract means keeping and restoring the contract in an accessible place so that every project stakeholders could access as and when necessary.
Some claim that it is an activity to keep the managerial positions updated of any changes to the signed contracts so that proper decisions could be made in time, and the others think it is mere clerical task such as claiming payments, reminding renewal if expiry date is coming.
CNC think it differently and do things different
Our lawyers pay serious attention to construction contract management as it ensures the compliance of the contract performance, enables Clients the earliest possible chance to recognize potential risks, and best mitigate any contract disputes that may arise during the entire contact lifecycle.
As such, Construction Contract Management is the process of managing legally-binding Construction Contract from initiation through to execution.
The purpose of effective construction contract management is to improve overall outcomes.
See how we render the Construction Contract Management service to our clients
Managing Variation Orders and Extension of Time Claims are two important changes to the Construction Contract that we normally deal with.
CNC can help to identify number of the VOs, EOT Claims and the status thereof. We could also set out the strategic plans to achieve the best outcome from those changes.
Under a construction contract, there are countless obligations require compliance and fulfillment. Wihout placing exceptional tracking systems in the Construction Contract Management, the Clients will deal with a blow.
Some of the typical obligations requires strict and proper compliances in a construction contract include those related to
QA/QC System
Safety
Design Review Period
Time for Completion
Payment
Determination.
We regular spend our time performing cross-check, review the Construction Contract Management by visiting the Site to check whether and to what extent if any further assistance should be made, any critical issues found out, any skills need to be developed, what documents are missing.
This help our Clients colleague immediately rectify errors, improve its ability to manage the Construction Contract effectively and efficiently, to general more value, lower costs, or to benefit from a better relationship.
Vendors (suppliers, subcontractors, manufacturers to name a few) are becoming an important factors in these days. Their performance can greatly contribute to outcome of a timely project completion. Therefore, checking vendors’ performance forms an integrated part of the construction contract managements.
The aim at which this task will bring is to allow the parties cooperate, collaborate with each other, and to understand if anything unusual or has happened to the vendor’s performance so that plan of actions could be there to cure or to adopt to counter the negative effects resulting therefrom.
The saying “Prevention is better than cure is a fundermental principles of the construction contract managements.
It is obviously agreed that the cost for experts to deal with any issue at an early stage is much cheaper than those incurred at a later stage where no enforceable or acceptable options is available.
In addition to that, by earlier identifying potential issues can help the contracting parties to have a better preparation just in case a dispute or an argument arisen beyond the parties’ control. A proactive contracts manager can have more time addressing the issues to the relevant departments, relevant stakeholders, and to enable them to obtain more insightful and meaningful advices, viewpoints.
Those can only be effectively managed by an expert as CNC.
Resolving disputes is considered the last step, last action, last recourse available to a construction contract party, but resolving dispute from contract management perspective is just another activity during the contract lifecycle. It means that each party must strictly adhere to the contract terms whilst resolving disputes, otherwise new or more disputes will arise.
The problem is that Clients normally don’t have the luxury resource of retaining such a large number of qualified personnel to deal with those matters. Therefore, relying on a better cost-effective solution, Construction Contract Management is recommended.
Neither the Employer nor the Contractor side matter to us. Although we are more favorite to help contractors but again, the experiences our lawyers have progressively gained help us when we act for the Employers and vice versa.
Let’s see what we have honorly been engaged and trusted by Clients since our inception in 2013. The following are notable cases without exclusion:
Manage a local leading construction contractor to manage a superstructure subcontract (with European based contractor) to build of one of the highest building in district 1, Ho Chi Minh, Vietnam. The serious issue the Subcontractor has encountered with was the Employer went bankruptcy and the Works were suspended for a lengthy period, but the Contractor and the Subcontractor remains its trust, collaboration and belief that the Works can be resumed once day. It therefore resulted in a large costs associated with the suspensions that neither the new Employer nor the Contractor or the Subcontractor would share the majority.
Assisted an innovative general contractor to manage a large-scale contract to build the first 5-star Grand Hotel project, located in District 1, Ho Chi Minh City overlooking the Saigon River. The contract value in 2009 was over USD $ 30million which include the management of a numbers of nominated subcontractors e.g. Commin Asia and Commin Vietnam Consortium, Lecade, KNI, Sinh Nam Metal, KONE. The Project was successfully handed over in 2014 after a 3 years delay due to the Employer’s financial problems during 2010 – 2012. Under this engagement, CNC team has involved in a variety of issues, from a change in design at level 8, the Employer’s interference with the Contractor’s management over the Nominated Subcontractors, the slip of the ID Packages, the ability of the Nominated Subcontractors, and the private agreement between the Employer and the Contractor to get loan from banks to finance for the Project. The reward to the Contractor for his willingness in this Project was that the Employer, without hesitated, awarded the Contractor another 5 important projects during 2015 and 2016, valued more than 80 million US$.
Assisted a leading construction contractor for a contract of A2 project – Phase 1 of the Celadon City complex, Tan Ky, Tan Quy, Ho Chi Minh City, with a contract value of over USD 35 million. Managed a large numbers of subcontractors including Jesco Hoa Binh J.S.C, Schindler Vietnam, CNA-HTE Vietnam in 2013. One of the unforgettable memory when we were engaged in this project was that the Employer forced the contractor to follow the Employer’s instructions and did not allow the Contractor to have any right to object to any nominated subcontracts regardless of whether or not such nominated subcontractors were obviously not qualified to perform the relevant packages.
A contract for renovation project of Trang Tien Plaza, with an investment of over VND400 billion, and strict requirements of engineering, architecture and tight schedule. Managing and coordinating large numbers of nominated subcontractors in M&E, elevators, generator installation, natural stone tiling for indoor and outdoor, and boards and signs for buildings.
a contract for Esquel garment factory project, with a contract value of nearly VND200 billion in Hoa Binh Industrial Zone, Hoa Binh province including construction of roads , fences, electrical engineering and steel structure during tight schedule.
a contract for management and development of Germs project located in the heart of the ancient capital Yangon, Myanmar, including 10 apartment blocks, 3 blocks for the first stage with the investment for structure of over USD 45 million invested by Capital Diamond Star Group Ltd., (CDSG).
a contract to build a new dormitory and hotel under Formosa Ha Tinh project invested by Formosa Ha Tinh Steel JSC., with a contract value of over VND 1 trillion. Managing and coordinating large numbers of subcontractors in M&E packages, finishing packages, facade packages.
a contract for the Navy Office and Commercial Center project, located at 15 Le Thanh Ton Street, Ben Nghe Ward, District 1, Ho Chi Minh City with the accepted contract amount of VND250 billion. Managing and coordinating large numbers of subcontractors in basement packages (shoring, piling, soil excavating and moving, steel drilling and implanting, well drilling for ground water lowering, bracing) superstructure, and finishing packages.
A contract for a series of Dong Phuong Wedding Brand, including Dong Phuong Wedding Building in district 5, Dong Phuong Bountique Center in district 7 with an estimated contract value of VND 400 billion. This series of projects belonging to the restaurant chain of Thang Long Corporation who accounts for nearly 50 % market share of restaurant and wedding service in Ho Chi Minh City.
A contract for the facade package of the tallest building in Vietnam. The estimated accepted contract amount is of USD 35 million between a joint ventrue (a leading facade contractor with a Korean contractor) and Tan Lien Phat, a member of the most recognised developer, VinGroup.
a contract for Vietinbank Head Office (Viettinbank Tower), with the estimated contract value of USD150 million. The contract is for construction of a 300,000 square meter mixed-use development consisting of 68- and 48-story towers joined by a seven-level podium. The 68-story office tower, standing at 362 meters tall, will serve as the headquarters of the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank). The second tower will house a five-star hotel, serviced apartments and spa. The podium will include conference facilities, retail, restaurants and cafés, and rooftop gardens.
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If you don’t have reliable resources to manage and monitor your contracts, simply reach us at contact@cnccounsel.com or at (+84-28) 6276 9900. We have a flexible solution to our clients’ need.