Construction Management Contracts: A Complete UK Guide

By

Emma De Francesco

Reviewed by 

Nicholas Dunbar

and Zoe Mullan

Last Updated Dec 30, 2025

By

Emma De Francesco

Reviewed By

Nicholas Dunbar

and Zoe Mullan

Managing construction contracts can lead to an extensive physical paper trail. Sharing contracts, getting signatures and managing timelines is difficult when teams and clients are scattered across job sites and locations. Centralising construction contract management is necessary for success and efficiency.

In the UK, effective contract control also means meeting statutory duties under the Housing Grants, Construction and Regeneration Act 1996 (HGCRA) and the Construction (Design and Management) Regulations 2015 (CDM 2015). Cloud platforms can auto-issue Payment Notices on the due date, ensuring HGCRA deadlines are never missed, and store project data on UK/EU servers to meet GDPR requirements.

Contract Management Basics

It is important to distinguish between 'Construction Management' (a specific procurement route) and 'Contract Administration' (the daily management of any construction contract, such as JCT or NEC). This guide covers both.

Contract management in construction involves managing legal documents that specify the duties, roles and responsibilities of both project managers and owners. It operates as a continuous process of assessing risk, identifying resources and defining partnerships. It contains defined processes and methods for conducting a construction project – from start to finish.

These contracts include detailed information about all parties and a clear definition of the Scope of Works (or 'Employer's Requirements' in JCT contracts), such as terms and conditions of the agreement, the rights of both parties, the amount to be paid, the date of commencement of the work, and the expected date of completion.

Proper contract management is essential, as poor practices can cause severe problems. Construction contracts must meet multiple legal and financial obligations throughout the entire building process. Construction already contributes roughly 7% of UK GDP; safeguarding that value begins with robust contracts.

What is a Construction Management Contract?

A construction management (CM) contract is a fee-based agreement in which a construction manager acts as the client's agent, planning and coordinating work packages rather than physically building them. There are two UK variants:

1. CM as Agent

   The client signs separate trade contracts; the CM provides programme, cost and quality leadership.

2. Management Contracting

   The management contractor holds the trade contracts and receives payment as a fee plus prelims.

Both approaches differ from the traditional main-contractor model and suit complex or fast-track projects such as major airport upgrades or data-centre fit-outs.

Benefits of Construction Management Contracts

Early design input speeds up fast-track schemes, while open-book costing increases price transparency, and flexible work-package tendering suits bespoke builds. For instance, Crossrail's station packages used CM to let multiple specialist contracts in parallel, shaving months off the programme and improving stakeholder trust.

Download our free Bill of Quantities template to keep scopes clear from day one.

Managing the Contract Life Cycle

Contract life cycle management – better known in the construction industry as CLM – ensures projects adhere to contractual elements by automating and simplifying multiple stages. These stages span drafting (often beginning at RIBA Stages 2–3), execution, change control, payment, ongoing monitoring and close-out at RIBA Stage 6.

Furthermore, CLM software allows customers to see exactly how much money projects spend and simplifies the contracting process for increased efficiency and fewer administrative expenses.

Standard UK Contract Forms: JCT & NEC

UK construction work usually operates under Joint Contracts Tribunal (JCT) or New Engineering Contract (NEC) forms. JCT relies on a Contract Administrator and separate Architect/Engineer duties; in contrast, NEC appoints a Project Manager and emphasises proactive risk management through Early Warning Notices and Compensation Events (issues flagged within two weeks). Choosing the correct option determines risk allocation, cash flow and dispute potential.

Risk, Payment & Dispute Avoidance

The HGCRA 1996 grants every party the statutory right to adjudication and sets strict timelines for Payment Notices and Pay-Less Notices. Notably, 'pay-when-paid' clauses are unlawful except in cases of upstream insolvency, protecting cash flow down the supply chain. Adjudication delivers a binding decision in as little as 28 days, ensuring that projects progress.

Additionally, under CDM 2015, a Construction Phase Plan must exist before work starts on site, and duty-holders must manage health and safety risks under the Health and Safety at Work etc. Act 1974.

Types of Construction Contracts

In the construction industry, there are many construction contract types and modifications, each using different kinds of agreements depending on the project's category. Projects typically fall into categories based on their statement of work, schedule type, budget structure, timeline or the parties involved.

A comprehensive construction contract does not necessarily comprise a single document – it may include ten or more documents defining responsibilities and risks regarding different aspects of the project.

Knowing which contract to use proves integral to ensuring overall project delivery. Client satisfaction, retention and profit may also be determined by the type of construction contract chosen for the project. So, choose wisely.

Here are eight of the most common types:

1. Design & Build (D&B): Contractor handles design and construction (e.g., JCT D&B).
2. Traditional (Lump Sum): Design by Client, build by Contractor (e.g., JCT SBC).
3. Management Contracting: Contractor manages trades for a fee (e.g., JCT MC)
4. Construction Management: Client holds trade contracts; manager oversees (e.g., JCT CM).
5. Target Cost: Pain/gain share mechanism (NEC Option C).
6. Cost Reimbursable: Costs covered plus fee (NEC Option E).
7. Measurement Contract: Price based on actual quantities (NEC Option B / JCT MWD).
8. Alliancing: Collaborative contracting (e.g., FAC-1).

Contract Management Roles & Responsibilities

At any stage of the construction project, the contract must remain easily available and under active management. Beyond the main contractor and client, sub-parties participate from the design phase to the execution phase, and different construction contracts must document all of them.

Managing numerous construction projects and contracts can lead to an extensive physical paper trail. Sharing contracts, getting signatures and managing timelines is difficult when teams and clients are scattered across job sites and locations.

To address these challenges, construction companies are beginning to centralise and digitise construction contract management. Centralising construction contracts means all parties can access information and update contracts and timelines anytime, anywhere.

Giving teams the right tools and information enables them to get the job done correctly the first time. Companies can accomplish more with the same headcount by optimising existing workforce productivity and efficiently moving staff from job to job.

UK Contract Management Salaries & Careers

Entry-level Contract Managers earn around £40,000, rising to £74,000 or more in London, where roles command a 10–15% premium. Many professionals progress from quantity surveying, site management or engineering backgrounds, while chartership with RICS or CIOB can accelerate career growth.

Streamlining Construction Contract Management

Keep the paper trail going - without the paper – with construction contract management software. Construction management software helps streamline tracking and distributing contract documents, variation orders and payment applications. It also offers a collaborative platform for contract management with controllable permission levels to restrict access and viewing rights to the proper parties.

Furthermore, cloud systems can automatically issue payment notices, tag Compensation Events, and remind users of NEC Early Warning deadlines, ensuring statutory and contractual compliance.

Book a free UK demo to see Procore CLM in action and discover how centralising information boosts team productivity.

FAQs

How much does a construction contracts manager earn in the UK? 

£40k–£74k+ depending on experience and location.

What are the five stages of contract management? 

Drafting, Execution, Change Management, Monitoring and Close-out.

Written by

Emma De Francesco

Strategic Product Consultant | Procore

22 articles

Emma is currently Strategic Product Consultant at Procore where she loves partnering with clients to help them achieve the best possible results. She has worked as a Project Manager in previous roles, responsible for overseeing small to medium-sized projects across various sectors including commercial, health and lifestyle, retail, government and hotels. Throughout these projects, she managed everything from project costs, program and quality & safety, to design management, procurement, and authority approvals.

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Reviewed by

Nicholas Dunbar

Content Manager | Procore

62 articles

Nick Dunbar oversees the creation and management of UK and Ireland educational content at Procore. Previously, he worked as a sustainability writer at the Building Research Establishment and served as a sustainability consultant within the built environment sector. Nick holds degrees in industrial sustainability and environmental sciences and lives in Camden, London.

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Zoe Mullan

27 articles

Zoe Mullan is an experienced content writer and editor with a background in marketing and communications in the e-learning sector. Zoe holds an MA in English Literature and History from the University of Glasgow and a PGDip in Journalism from the University of Strathclyde and lives in Northern Ireland.

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