The role of the Project Manager under the Red Book is a balancing act (like any contract administrator).
Firstly, they act as agent for the purchaser. The PM has full authority to act on behalf of the purchaser (with a few exceptions) and must act reasonably and in a timely manner (11.1). The PM’s authority derives from the express terms of the contract.
Secondly, the PM makes decisions that affect the rights and remedies of both the purchaser and the contractor. This is emphasised by the contract, which requires any discretion, judgements, or opinions to be impartial and carried out to the best of their skill and judgment as a professional engineer (clause 11.1(d)).
Tasks to Carry Out
The role of the PM can be split into:
- Co-operation: The Red Book requires the parties and the Project Manager to ‘co-operate with each other… with the aim of satisfactorily completing the plant and the works in accordance with the contract’ (2.1). This extends to dealing with each other fairly, openly and in good faith and promptly disclosing all relevant information (2.2).
- Time: The PM approves the contractor’s programme (13.2), can warn the contractor if progress falls behind the approved programme (13.4), issues the taking over certificate (33.7), and grants extensions to the date or period for completion (14.1).
- Cost: The PM issues interim certificates of payment (41.4), has authority to order variations (16.2) and values any variations that the parties do not agree (18.1).
- Quality: The PM approves the contractor’s documents (21.2), which can include designs. As well as testing, the PM can instruct the contractor to rectify defects before taking over (22.6) or afterwards (37.3), and confirms completion of any outstanding items or work after taking-over (29.4).
- Testing: The PM inspects and tests materials plant before installation (22.1), and attends and observes the tests relating to the completion criteria (32.3), take over (33.3), performance (35.5), and carries out/attends any performance tests (35.2).
Essentially the PM supervises and tests the works, manages the processes under the contract and monitors the contractor’s performance against key objectives such as time, cost and quality.
What Should You Do?
You’re the Project Manager? Given the critical role of the contract administrator you must read and understand the Red Book – especially its processes, risk management and testing – before work starts.
You’re A Party? You need to understand the limits on the PM’s authority (see clause 11.1), and work collaboratively with the PM to meet the project objectives.