Construction Management is Easier with a Cloud-Based Contract Management System Part 1: Procurement

By Concord Editorial   Jun 5, 2015

By Benjamin Fleshman

My first exposure to the world of contract management, construction contractors and subcontractors was relatively small. I was hired on by a subcontractor to install cabinets in a new high school in the area over the summer before I went back to school in the fall.

I didn’t learn anyone’s name, really, as I kept mostly to myself, but I could see the framers doing their work, the painters doing theirs, the grounds crew getting on with it, and the architect, project manager, and contractors meandering around in their colored vests, observing. There were a dozen other trades on that work site, and it occurred to me that someone had to be organizing the whole thing.

That’s the trick, isn’t it? Someone has to be organizing all of these different trades, especially in a day and age with such intricate construction management. Someone has to be in charge of assigning positions to subcontractors, checking up on things, and making sure that everything runs smoothly. Even though my inexperienced self might have looked at the construction manager’s air conditioned trailer with the jealous eyes of an exhausted, overheated 20-year old, they have a hard job. Their job doesn’t have to be hard, though.

Allow me to explain. I obviously don’t work in construction anymore (hence the article that you are currently reading), but I do know something about the way that contractors and subcontractors get the jobs that they get, and thus the payment that they need. When you boil it down, it’s all done through procuring services through contracts.

You’ve gone over the budget for the project, the design of the building in question, the amount of risk that you’re willing to take on the project, the amount of control you’re willing to delegate to subcontractors, but what you really need now are the subcontractors. The most common method of procurement is the Design-Bid-Build method. In fact, according to CMAA, 60%of contracts are procured through this method. The next most common are Construction Management at Risk, holding 25% of the procured contracts, and Design-Build with 15%. You might even be one of the less than 1% of people that uses Integrated Project Delivery. If you aren’t sure which sort of procurement system to use, or what contract would work best for your circumstance, check out this article that should help clear up some questions you may have.

Whatever system your company uses, the easiest way to manage your procurement contracts is with a cloud based system.

A cloud-based contract management system, like Concord Worldwide, holds all of your contracts in a single location, so you don’t need to hunt around in filing cabinets for them. There are even templates that you can access to save time drafting the contracts.

What’s more, when you’re still negotiating the terms of the contract in question with subcontractors, you can easily access and edit the contract to accommodate. The instant their bid is accepted, you can incorporate it into the contract. You can review the contract easily before you sign it, to clarify errors or inconsistencies that you might have missed before you sign it.

Yes, these are all things that you could potentially do with paper copies, but the beauty of an online contract management system is the superior speed at which you can act. You don’t need to print and reprint contracts, because it’s all electronic. You don’t really even need to meet in person, because you can sign the document electronically for the contract to be legally binding. Reducing the times for meetings, editing, rehashing, and reformulating the contract before it’s ever signed can save you a lot of time. In fact, 18% of an enterprise’s sales cycle, including construction management, is spent on contract creation, negotiation, and approval. According to Aberdeen Group, reducing your cycle by even one day can save approximately $80,000.

If you’re curious about what else a cloud based contract management system can do for your company, check out Concord and see what other costs you could save.


CLICK HERE for part 2

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