The impact of Contract Administration on project management success in the South African Mining Industry

Abstract

South Africa is estimated to have $2.5-trillion worth of mineral resources. The development of the assets to extract these resources is critical for the economic success of the country. Despite the fact that there have been major improvements in the project process, many projects continue to fail. Contracts are a critical tool for project execution as they are the means by which projects utilise resources to achieve their objectives. Limited research has been conducted into the impact of contract administration on project management success and the contract administration actions required to support project management success. This research aims to assist in filling this gap. A structured interview was conducted on a case study, the AngloAmerican Sishen South project. This project aimed to develop a 9 million ton per annum iron ore mine. A cross section of project members was chosen as participants in the interviews. Contract administration does impact the project schedule, project costs and project scope and thus the project management success. In line with literature, effective contract administration needs to incorporate scope management, performance management, document control and dispute resolution to positively impact project management success. In addition to these, the research highlights effective contract kick-off meetings, training of contract administration staff and continuous improvement as contract administration actions that are also needed to positively impact project management success. Project managers should view contract administration as an important project management tool that contributes towards to project management success. The contract administration team should be expected to contribute towards managing the project’s schedule, costs and scope.