Project Governance and Contracts

This article provides information on project governance and contracts in construction projects. It discusses the recommended governance structure, individual responsibilities, and project phases. It also emphasizes the importance of proper decision-making, regular monitoring, and maintaining focus on the project scope.

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Project governance and contracts
Institution
Student name
Date

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Executive summary
Successful implementation of a construction project by the contracted company is the
primary goal. The company tendered to deliver the project hence has to strive in giving the best
out of the budget and the timeline of the project. This article is written at the capacity of
construction project consultant aiming to deliver the vital information accrued to construction
works of the capital intensive construction executive board members.
The report scope revolves around the governance regime at the construction project. The
report is also dedicated to recommending the best criteria to use when selecting the governance
structure of the project. The report also gives an insight into the phases of the project the
construction project should take to ease delivery of the project. The report is prepared on the
reference to data available on the construction projects. The collection of data methodology
hence is the limitation of the report.
Table of Contents

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Introduction.................................................................................................................................................2
What is project governance?.......................................................................................................................2
Recommended project governance structure in construction project........................................................4
Establishment of a single accountability point........................................................................................5
Appointment of working groups and stakeholders.................................................................................5
Right system selection.............................................................................................................................5
Regular monitoring..................................................................................................................................6
Maintain focus on the cope.....................................................................................................................6
Reasons for recommending the structure...................................................................................................6
Individual’s responsibilities in the construction work project.....................................................................7
Project owner, shareholders or the client...............................................................................................7
Architect..................................................................................................................................................7
Facility manager......................................................................................................................................8
Health inspector......................................................................................................................................8
Construction workers..............................................................................................................................8
Project Phases.............................................................................................................................................8
Initiation phase............................................................................................................................................9
Planning.....................................................................................................................................................10
Execution phase........................................................................................................................................10
Project steering committee.......................................................................................................................12
Team reference for the project steering committee.................................................................................12
Policies and procedure as to how PSC operates........................................................................................13
Conclusion.................................................................................................................................................14
Recommendation......................................................................................................................................14
References.................................................................................................................................................14

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Introduction
Many clients or owners of the construction projects cannot manage and undertake the
process of installing the project successfully. The clients find it easy to contract the capital
intensive companies to undertake the project. The clients of the projects include the individuals,
government, and cooperates organization (Bekker, 2015). The project themselves include
transport routes like rail lines, roads, bridges, water collectors, and mansions of significant size.
What is project governance?
Construction project governance is defined by experts as the framework adopted by the
construction organization to install orders in the project delivery process. The project governance
defines the hierarchy of the human resource in the organization and how the individuals should
relate to one another in the organization.
The governance is meant to inform the managers and the leaders on how to handle the
various situations that may arise in the project. The governance of the project makes it easy for
the management to develop and implement ideas in the project (Brahm, & Tarziján, 2015).
The decision-making process of the project is also efficient and robust due to consultation
and time taking when the governance installed in the project is efficient. Random decision-
making in the organization of the construction project works possess a lot of dangers to the
project. The individuals may think to be efficient in the decision they make at random contrary to
the truth.
Decision made through consultation of the various players in the organization is more
efficient and minimizes the crisis in the organization. Consultation leads to the appropriate
allocation of the resources of the project work. The resources in this note include the physical

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resources, the finance, and the human resources of the project. When the appropriate decision in
these aspects is made, the management can realize the design of the project at the highest
possible quality. It also helps the management to understand the needs of the employees and
motivate them respectively to attain a positive working environment (Cutler, & Dietz, 2017).
The quality of the project has a higher reliance on the decision-making mechanism
adopted in the project. If the managers decide randomly, the conduct of the activities in the
organization ends up confusing the human resource and other managers, one manager will direct
the employees to do something, and the commands of another manager will likely contradict
subjecting the employees in a dilemma. This eats up into the resources and time of the project,
failing its realization on time and budget hence the failure.
Proper decision-making process also enables the management to use the funds in the
project in the proper manner; the responsibility and accountability of the individuals are known
hence ease to trace the commercial use in the project (Fernandes, Pinto, Machado, Araújo, &
Pontes, 2015). It also makes it easy to trace the commercial use and control of the inventory of
the project.
The governance of the project sensitizes the player in the project on the acceptable
communication channel. The adopted channel of communication enables the executive manager
s to access the information from the construction work in the lowest level of the organization.
The executive manager can know the factors affecting the working environment and the best
method that could be used to handle the situation.

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Recommended project governance structure in construction project
There exists a variety of construction project governance the executive manager may
adopt in the organization. The efficiency of the adopted governance structure varies and depends
on the experience of the executive managers on the adopted governance structure. The leadership
and management theory adopted is contingent, claiming the leaders may be ineffective in
managing the finance of the organization but efficient in managing the human resource.
Allocation of the duties to the leaders and the managers is therefore based on how efficient the
individual is in the respective field (Joslin, & Müller, 2016).
However the adopted governance is efficient, the managers and the leaders have to
understand and relook at the following discussed key departments and scenario of the project
governance to ensure the project is governed most decently and professionally.
Establishment of a single accountability point
Lack of accountability in the project is the leading cause of project failure. The finance
meant for the project ends up being embezzled, and the resources misused as well as the human
resource is allocated duties poorly. Having a single point of accountability improves the
performance in the project delivery through having the accountable personnel on the decisions
made in the allocation of funds, human resource, and other physical resources of the project
(Longo, Zappatore, Bochicchio, & Navathe, 2016).
Appointment of working groups and stakeholders
Many cooks spoil the broth however efficient they are. The stakeholders should be
selected following their ability to deliver. They should not be many but should be sufficient to
run the entitled duties and have the capacity of making wise decisions. When their number is to
low, the possibility is the decision made will be less competitive, on the other hand, if the

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stakeholders are too many, the decision-making process will take a lot of time eating up into the
time of project delivery hence delivering the project time later than the expected timeline (Lu, Li,
Da, & Zhang, 2015).
Right system selection
The systems used in the finance department has to be the recent and the most competitive
available in the systems market. Use of a robust system will facilitate the organization to operate
in a fund embezzlement controlled environment, and the use of the resource can be traced. It also
facilitates positive inventory control.
Regular monitoring
The significance of project monitoring is not a subject to ignore. The management and
the leaders have to exercise an exclusive and regular monitoring exercise to the project delivery
process. Monitoring of the project enables the management to check on the quality of the work
delivered by the workers and recommend changes as well as give a directive in the next step in
the project (Melander, &Lakemond, 2015).
Human behaves different, and they can intentionally deliver shoddy quality work
intentionally on the foundation of recklessness or ill motif in the workplace. The management
monitoring activity helps in identifying such character and takes the respective measure. On the
other hand, human resource may lack the capability to deliver in the project; the management
identifies such individuals and replaces them or coaches them.
Monitoring also ensures the resources of the organization are used in the correct manner,
and there is little wastage in the project resources. In this note, the resources include the physical
material of the project, finance, and human resource.

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Maintain focus on the cope
The reason many projects fails is a lack of focus on the main agenda of the project.
Deviation from the project scope eats up into the project in all dimensions; first, it eats up on the
project time, leads to resources wastage and misuse of the human resource making it challenging
to deliver the project on the estimated time and budget (Müller, & Martinsuo, 2015).
Reasons for recommending the structure
In the prior discussion of the project governance, it is evident that the project governance
prior recommended helps the managers of the project to keep track of the financial uses of the
organization by adopting an appropriate system. It also reduces the possibility of resources
wastage by maintaining the scope of the project hence delivering the project on the estimated
time and budget (Muller, 2017).
The crucial aspect of the governance on monitoring of the project enables the project
managers to evaluate and analyze the quality of the project delivered to the given level and give
a recommendation to changes or a congratulatory to the excellent work done. In the same note,
the managers can identify the issues affecting the human resource and strategize the means to
motivate them on the understanding of the employees as a system of social society determined to
deliver an economic project hence consideration of their emotional needs.
Individual’s responsibilities in the construction work project
Construction work can’t be undertaken in one-person show manner; hence, the project
involves numerous players in the course of work. Below are the likely significant individuals
involved in the construction of the project and the roles they play (Müller, Pemsel, & Shao,
2015).

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Project owner, shareholders or the client
These are the individuals who have the total ownership of the project and are liable to
fund the project from the instantiation stage to the completion. They are responsible to taxpayers
for the project and answerable to the various legal questions in the project. The named
individuals’ are private individuals, cooperates, or the government.
Architect
These are the experts involved in the construction project works as the monitors of the
project quality delivery following the project plan.
Facility manager
These are the managers in the construction project who works for the client or the owner
of the project (Müller, Zhai, & Wang, 2017). They make decisions on behalf of the project owner
to ensure the project is delivered on time and budget through ensuring the finance and the
inventory is controlled efficiently.
Health inspector
Construction works are hazardous and risk to the human health; the health inspector is
responsible for educating the human resource on the significance of taking the recommended
health measures to ensure the health of the employees is maintained at the top thus reducing the
loss of the human resource on ill health ground (Zhai, Chi, & Le, 2016).
Construction workers
These are the actuators of the project. They are the personnel’s involved in the actual project
realization.

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Project Phases
Construction projects, even the smallest ever implemented are at times, started from
scratch, implying the project has the phases evident from start to finish ensuring quality and
efficiency in the project implementation.
The main phases of construction works include the:
a) Initiation
b) Planning
c) Execution
d) Closure
The phases are implemented in the order above. Other divisions or the phases includes
the control phase, but the conciseness on this report due to the word limit, the control aspect of
the construction project will be covered in the execution phase.
Initiation phase
This is the first phase of the project, and the contractor is interested in knowing what
about the project and what he is about to construct and for who. The contractor and the
management come to the realization of the project at hand whether it is a bridge, road, or a
mansion. At this phase, the vision on the project is initiated in the mind of the contractor
(Nuottila, Kauppila, & Haarala, 2016).
The management of the project sits and analyzes the feasibility of the project to
determine the business case of the project. The milestones of the project are also highlighted to

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determine the critical areas of the project. In layman language, this phase is the direction giver of
the project delivery.
The steps in the phase include:
a) Analysis of the project feasibility to define the need for the project and whether it is worth to
invest in the project.
b) Analysis of the depth and the breadth of the project on the matter scope.
c) Analysis of the project benefits against the cost incurred in the project delivery to identify
whether there exists an alternative method to solve the scenario.
Planning
This phase is preceded by the approval of the initiation phase document showing that the
project is worth to invest in and showing the main milestones of the project.
The main task is divided into various tasks. The teams are built and assigned the
responsibilities of handling the tasks as a measure to ensure the project is realized effectively by
achieving the sub-goals of the project (Oedewald, & Gotcheva, 2015).
The main steps included in this phase are:
The main steps of the project are diagrammed to analyze the timeline of the project and
the constraints likely to be encountered in the project realization. The estimation of the project
timeline is arrived at from the analysis of the timelines estimated to accomplish the sub-goals.

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The project planners also identify the resources needed to implement the project. The
resources include the materials to be used at work, and the human resource required to
implement the project. The level of expertise needed in the project is also identified hence
enabling the planners to gather the necessary information on the estimation of the budget of the
project (Turner, 2017).
Execution phase
This phase involves visiting the actual site of setting up the project. The phase involves
the actual construction work and a lot of human and machinery power. The actual construction
work is divided into sub-tasks, and the experts of the areas are assigned to each. The timeline and
the budget of the sub-tasks are estimated at this phase, and the materials of work availed.
The leaders are in the project are involved in exercising the duty of inspiring the human
resource on the need to realize the project at hand. They also identify the behavior of the
employees at work to identify the factors affecting the employees and the measures to be taken to
solve the situation. The leaders also motivate and coach the employees to ensure the performance
is of satisfactory quality (Hurk, & Verhoest, 2015).
In this phase, the management has the responsibility of ensuring a proper control,
coordination, planning and leading the employees to ensure proper allocation of resources in the
project as a measure to combat the losses on resources wastage. This ensures the project is
delivered on time and within the budget.
Communication also dominates the phase to ensure effective coordination and control of
the activities. Research conducted in America based projects claims about 60% of the failed

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construction projects has a direct link to poor communication. The managers must, therefore,
excise a well-defined communication mechanism to ensure the project manager is aware of what
is happening among the lowest level employees (Marrewijk, & Smits, 2016).
The phase also involves a lot of minatory activities on the performance to ensure the sub-
tasks are implemented at the highest level of quality. The management is, therefore, able to
identify and strategize the mechanism to increase the quality of the project and performance of
the human resource.
Project closure phase
Finishing the construction works does not imply the end of the managerial work on the
project. The manager drafts and analyzes the detailed performance of the project. The
performance is documented and submitted to the client to show the milestone incurred in the
project realization.
The managers are also expected to account for the unused budget for the project at this
phase. The resources unused in this case include the liquid cash and the materials like tanks and
the pieces of machinery involved in the realization of the project but can be used in another
project (Wang, Chen, Fu, & Zhang, 2017). Other materials usually categorized as waste are also
accounted for; materials like the unused and unusable metal pieces have a monetary value when
sold to the recycling firm.
Project steering committee
This is a committee of experts involved in the construction works. The committee works
with the management team to offer the advisory services on the best and competent budgeting,

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marketing strategies, preferred management structure and the mechanism to handle matters that
may arise in the process of project realization. The committee is mainly involved in advisory
works to the management acting on behalf of the client or the client himself (Whincop, 2017).
Team reference for the project steering committee
Project realization faces crises from the word go. From the initiation phase to the closure
phase of the project, none of the activities has a smooth flow. The management, therefore, faces
a rough time to align the activities as a measure to ensure the performance of the project delivers
quality output.
On the reasons above the client and the management hires experts to give advisory
services to the client or the management on the financial use, marketing for the supplies, and the
health measure of the workforce. The team, however, faces significant drawbacks making the
advisory service of less significance. These drawbacks include the increased and competent
bargaining power hence affecting the budget drafted to the point of making the draft insignificant
to the project. The manager hired also affects the project through the disparity on the objectives
and positivity to work where communication is poor (Wu, Wang, & Chen, 2017).
Policies and procedure as to how PSC operates
The policy of the committee is to ensure the project at hand is delivered within the
budget, and the timeline estimated to complete the project. The policy also includes the
development of the mechanism to reduce the impact of the occurrence of the risk of occurrence
of a risk. The committee also undertakes the policy of ensuring a good relationship between the

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organization and the authority as well as the project management. All these policies are meant to
improve the quality of the project delivered.
The procedures involved in the process include giving advisory services to the client in
setting the budget and estimating the timeline. These two aspects help the client to know whether
the business is feasible or not hence the need to implement it (Wu, Zhao, Zuo, J& Zillante,
2018). The committee also engages itself in the negotiation of the legality of the project to the
authority on behalf of the client. Finally, the committee develops a strategy for measuring the
benefits of the project against the cost and the period the project is likely to pay back.
Conclusion
The article delivers a report on matter construction and the governance of the project that is
recommended to ensure the project runs smoothly, thus delivering quality output. The report
gives an insight into what project governance is and what it entails.
The report also identifies the characters involved in the construction project works and the roles
they play to improve the general output quality of the project. The responsibilities of the
individuals are given along with the recommended governance structure. This report also depicts
the main phases of construction project implementation and the activities and the individuals’
involved in each phase.
Recommendation
Project managers should adapt to the best and competent project governance structure to ensure
efficiency. Good governance enables the managing team to identify the crisis in the project and

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how to handle them. The managing team should also maintain a good relationship with the
project steering committee to ensure the constant availability of advisory services.

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