Impact of Poor Contract Administration on Project Costs and Timelines

Contract administration is a fundamental component of construction project management, ensuring that projects adhere to contractual obligations, budgets, and timelines. Poor contract administration has been identified as a leading cause of cost overruns and delays in construction projects worldwide. In view of this, the study assessed the impact of poor contract administration on project costs and timelines in the construction industry. The objectives of the study are to assess the impact of poor contract administration on project costs and timelines, as well as to propose strategies for improving contract administration in construction projects. Data were collected from 63 professionals in construction companies listed in Abuja using structured questionnaires. The analysis of data was carried out using descriptive statistics such as percentage, Mean Item Score (MIS) and Gini’s Mean. The findings revealed that revenue leakage (RII = 0.82, Wi = 0.0968) ranks highest, indicating that ineffective enforcement of payment terms and invoicing delays leading to substantial financial losses is the most significant impact of poor contract administration on project costs. Supply chain inefficiencies, project delays, and disruptions due to disputes are the most significant operational challenges arising from poor contract administration. These variables share the highest RII (0.78) and Wi (0.0977) values, underscoring their critical impact on project execution. The most effective strategies for improving contract administration in construction projects are clear and well-defined contracts and effective contract monitoring and documentation (MIS = 4.56 and 4.52, respectively). It was, however, concluded that revenue leakage, cost overruns, and contractual disputes emerge as critical financial risks, while supply chain inefficiencies and regulatory non-compliance disrupt project timelines. A major recommendation from the study was that professionals should ensure contracts include precise scope definitions, pricing structures, and performance metrics to minimise ambiguities and disputes.