Contract Memo Overview
The preparation and processing of Contract Memorandum forms is an integral part of administering a Contract. It establishes and maintains appropriate consistency and management of records and proper contract administration.
The Primary Consultant or Construction Manager prepares a “Contract Memo” where:
Information is required to be communicated to the contractor; for example, clarification of documents, advice regarding colour schedules, advice regarding specific suppliers of nominated items, instructions to cease or temporarily suspend (or conversely proceed with) all or part of the contract works.
Information is required from the contractor ie. request for a price quotation, advice on program.
Where a contract sum adjustment is required; for example, deletion of a PC Sum from a contract, re-inclusion of PC items of work at actual costs.
To allocate Principal Initiated Delay cost adjustments against the Contract Sum, where delays have been occasioned by a series of variations and other issues that are too difficult to allocate against specific variation orders, or where delay has occurred by partial or temporary cessation of the works.
The contract memo is authorised by any of the parties authorised in the letter of administration, and is issued to the Contractor with copies to other relevant project team members.
Items ‘1’ and ‘2’ above will not normally attract any costs (except for potential prolongation costs for programme disruption), whereas item ‘3’ and ‘4’ will constitute cost adjustments.
Contract Memos vary the contract without varying the scope of work. If the scope of work is to be altered a Variation Order much be used.