contract-management-4Many projects rely on the supply of hardware, software, facilities, and services by various vendors or sub-contractors. The Project Manager may need to:
 select the best suppliers,
 negotiate terms and conditions,
 agree contracts,
 ensure the goods or services supplied are acceptable,
 deal with disputes,
 negotiate changes where the client requires new or changed deliverables from the vendor,
 ensure the vendor or sub-contractor is paid in accordance with the agreement,
 Manage the relationship to maintain a good working relationship.
The Project Manager has an important part to play – but remember what you are not…
 You are not the right person to enter into contractual relationships on behalf of the organization. It will usually be a senior manager who is most appropriate and is authorized to agree the terms and sign the contract.
 You are not a lawyer. Although it is in your interest to see that, the deal meets your needs, use lawyers or other specialists to determine the precise wording of the contract.contract-management-1
There are many different situations requiring contracts. Your approach may vary considerably. In terms of scale, look at these examples:
 complete outsourcing of facilities and business functions,
 outsourcing the development of a new IT system,
 sub-contracting the development of a specific component of your new system,
 purchase of packaged software and on-going support,
 using consultants from a major consultancy firm,
 hiring a freelance programmer working as a contractor,
 Additional licenses for standard desktop software.
contract-management-2Most people and businesses are reasonably honest. They need satisfied customers to build their reputation and gain future work. However, some of them will bend the truth a bit if they feel it is legitimate. We call such people “salesmen.”
For example, in a selection exercise if you ask the question “is your system user friendly,” you can guarantee they will say “yes.” It was not worth asking the question. Worse than that
, some vendors will use the word “yes” to mean, “Yes – it could be done … if we modify the system for you.” You need to probe for the truth and make sure you leave no room for them to mislead you.contract-management
Watch out for the hidden extras. If the contract does not say something is included, you can guarantee an additional charge for it. By the
n you will be tied into the relationship. You will find you have a poor bargaining position when negotiating those charges.
Beware of the sharks!