Contract vs.

Project Management (graded)

A project manager and a contract manager are both needed to
administer a procured project or process. If you were the project
manager, how woud you wor! with a contract manager to ensure a
successfu procurement" In answering this #uestion, consider such
issues as, at what point you woud want to get the contract manager
invoved in the project, what areas of the contract you woud want to be
his or her responsibiity, how much and what types of communication
you woud want the seer (i.e., the contracted $rm) to have with the
contract manager, and who woud hande con%icts that might arise with
costs, schedues, or scope. Pease remember to answer a components
of the #uestion.
The areas of contract or activities that would be primary responsibility of the
contract manager are:
- Identify deliverables and how their achievement will be measured, ascertain
timeframes
- Understand payment arrangements, including links between payments and
performance.
- Identify the roles and responsibilities of both parties and allocate
responsibilities within the customer organisation.
- Conrm agreement with the service provider, especially in relation to any
sensitive matters.manage the contract !start up! e"ectively and to provide a
- #anage the process relating to unresolved issues
- $dminister the contract e"ectively% Undertake performance management%
&egotiate contract variations% and #anage contract disputes.
'n a regular basis, the contract manager would be re(uired to :
- develop and maintain contact details of key people involved in the contract%
- scheduling meetings and other actions re(uired by the contract delivery and
acceptance of the goods or services%
- #aking payments%
- #aintaining complete records for the contract itself and establishing and
maintaining contract documentation.
$s a pro)ect manager my duties are as follows:
Create the strategy, plan, dene the pro)ect, schedule resources and costs,
manage risk, provide leadership, monitor progress, motivate and control.
The contract manager deals strictly with the contract, contract employees, and
serves as a point of contact for contractual matters.
I will get the contract manager involve when the pro)ect is at risk due to
contractual deciencies. *owever, a steady line of communication needs to
always be opened between pro)ect manager and the contract manager at the
very start of the pro)ect.
The area of responsibility of the contract manager will be anything that has to do
with the signed contract between the contractor and the customer.
Con+icts with scope, cost and schedules should be resolved between both
pro)ect manager, contract manager and the customer. *owever, all , are the
responsibilities of the pro)ect manager from the start of the pro)ect and could be
ad)usted-reviewed amongst all parties.
.ro)ect #anagement is the discipline of planning, organi/ing, and managing
resources to bring about the successful completion of specic pro)ect goals and
ob)ectives. Contract management includes negotiating the terms and conditions
in contracts and ensuring compliance with the terms and conditions, as well as
documenting and agreeing any changes that may arise during its
implementation or e0ecution. It can be summari/ed as the process of
systematically and e1ciently managing contract creation, e0ecution, and
analysis for the purpose of ma0imi/ing nancial and operational performance
and minimi/ing risk.
.ro)ect #anager is responsible for
2 3ene re(uirements, perform make vs. buy $nalysis, develop 4tatement of
5ork-4pecication, identify .otential 4ources, determine 4election Criteria,
3etermine 6udget, Identify 4chedule
2 #onitor 4eller .erformance, #anage Contract Change, 7esolve 3isputes, 8ulll
Commitments, 7eview 8inal product-documentation, 7ecover-7eallocate 6uyer-
8urnished 9(uipment
5hereas Contract #anager is responsbile for
2 7eview 7e(uirements, .articipate in #ake vs. 6uy $nalysis, 8inali/e 4tatement
of 5ork-4pecication, *elp 3etermine 4election criteria, 3etermine #ethod of
4olicitation-Contracting, 3evelop Contract Ts :Cs
2 .articipate in .erformance 7eviews, $uthori/e Changes, 7esolve 3isputes,
9nsure all payments have been made, Close out Contract.
$ pro)ect manager must work closely with the contract manager to ensure that
the pro)ect is going as it is suppose to. There should be continuous
communication between the two.
It may be a point where a special task needs to be completed but can only
happen through special e0pertise. Therefore a contract manager who is
knowledgeable in that area is hired and he-she must make sure to deliver all
products or services according to the pro)ect schedule.
$ny con+icts with the costs, schedules and scope is the )ob of the pro)ect
manager to handle, and if it a"ects the contract manager, then the pro)ect
manager must work on the con+ict and inform the contract manager. These
types of con+icts are the pro)ect managers; responsibility to manage, while the
contract manager takes care of approving all legal ramications and the contract
in general.
&hat are the di'erences between the project manager and contract
manager"
The pro)ect manager oversees the scope of the pro)ect, manages the pro)ect
schedule. The contract manager keeps the pro)ect on schedule - sees that the
work is being done, updates the pro)ect manager on the progress.
4imple as this may sound, the ad)ectives tell the di"erences. The pro)ect
manager is responsible for the pro)ect, while the contract manager is responsible
for the contract if there is any. I believe that many pro)ects run without a contract
manager, again because there isn;t a contract.
*owever literally, while the pro)ect manager plans, run strategy, develop scope,
risk, schedule and cost, the contract manager is busy with guidelines,
specications, legal issues, and is liable for the actual work and the conformance
to the design put forth by the pro)ect manager.
The pro)ect manager is responsible for the pro)ect-related coordination. The
contract manager is responsible for administering the contract. The pro)ect
manager is responsible for identifying the pro)ect-related coordination including
the planning, scope denition, risks and schedule while the contract manager is
responsible for reviewing and approving all aspects of administrating the
contract.
&hat !nowedge shoud a project manager have and what !nowedge
shoud a contract manager have to perform the jobs"
.ro)ect manager should have knowledge pertaining to the overall pro)ect, such
as the scope, outline, goals, and ob)ectives basically an overall outlook of the
pro)ect operations and structure. 5hile the Contract manager share some of the
knowledge pertaining to the pro)ect, but they also hold knowledge to the
specics of the contract procurement and the laws-pricing associated with them.
Content knowledge resides mainly with the pro)ect manager and knowledge of
legal contracting ramications typically resides with the contract administrator.

.ro)ect #anager should have knowledge of pro)ect scope-re(uirements,
5ork-4pecication, work breakdown structure, 6udget, 4chedule, pro)ect
documentation, team skills and e0pertise, 7eview 8inal product-documentation,
pro)ect e0ecution and successful implementation. 5hereas the Contract manager
should have the knowledge of contract terms and conditions, ma)or milestones,
performance reviews, dispute management and resolutions, service level
agreements, payments and close out contract.
The pro)ect manager must have the ability to bring all aspects of a pro)ect
together as one working unit. They must have the ability analy/e all the di"erent
people involved in a pro)ect and help them work together as a unit. The contract
manager must know how to sell and they must have intimate knowledge of what
their customer wants and is looking for in a business situation. They must
possess the ability to analy/e a contract and also needs to have a good
understanding of the scope of work and the cost of completing the contract.
&hat do you thin! about hiring a project manager (PM)"
I would think that hiring a pro)ect manager would be one of the toughest )obs to
do. The reason I say such is that when I think about all the (ualities that you
would have to look for in a good pro)ect manager, I feel it would be e0tremely
di1cult to nd someone who possesses high marks in all the areas. Thus, the
hiring manager would have to somehow have to prioriti/e which (ualities are
more important than others. $nd when I think about the (ualities in which I
would want in my .ro)ect #anager, I nd it hard to place a higher priority on any
(uality over another. In hiring a .#, I would be looking for someone who
possesses the following skills:
<. Communications 4kills - the .# has to be able to communicate with vendors,
workers, managers, stakeholders, etc.
=. 6udget #anagement - the .# must be able to develop and manage a budget.
,. 'rgani/ational 4kills - the .# must be organi/ed and have the ability to
organi/e others working on the pro)ect.
>. #otivational 4kills - the .# must be able to motivate others to perform their
duties and responsibilities.
?. Team @eader - the .# must possess good team leadership skills to lead others
toward a single goal of pro)ect completion.
A. $bility to *andle #ultiple Tasks - the .# must be able to handle and-or
delegate multiple tasks simultaneously.
B. $bility to 5ork with $ll @evels - the .# must be able to work with everyone
from the C9' to the )anitor.
C. $bility to 'vercome *urdles - the .# must be able to overcome obstacles,
une0pected delays, untimely events, and still be able to get the )ob done.
These are )ust some of the traits in which I believe a good .# should have. Thus,
the reason I feel hiring one would be a nightmare.
Those are indeed important skills, $ndre. I think that generally it is a good idea to
hire a pro)ect manager because it will help alleviate some of the stress that will
come with a comple0 pro)ect. 8or pro)ect managers, it is their )ob to manage
pro)ects well and they will probably have more e0perience in dealing with
comple0 issues. 6ut, we have to make sure to screen and hire the proper
manager for the pro)ect% otherwise, it could all be for a moot point.
&hat steps might you ta!e to $nd the right contractor and project
manager"
The rst step I would do to nd a contractor and pro)ect manager was to ask
around and see if anyone has used a contractor and .#. If not I could nd one in
the yellow pages, etc. $fter choosing a few I would basically interview them and
ask for references. I would use the information that I gathered from the
interview, references, the cost and time table and make an educated decision to
nd the !right! contractor and pro)ect manager.
$sking around is a great rst step. $ lot of )obs get lled by using word of
mouth and prior knowledge. The businesses have worked for already had
dedicated sub contractors for all of the areas needed when I stated working
there. I would )ust call one of the supervisors whenever I came across a situation
that needed outside help. 5e didnDt really have time to do interviews or call for
references. If the work was bad then it was usually in the contract for the sub
contractor to be in charge of making things right. *owever, it was our problem if
the sub contractor caused us to miss deadlines or made work slower for the rest
of our crew.
8inding out about the contractorDs and pro)ect managerDs past performance is a
good way to determine if he-she can manage the pro)ect. #y e0-employer asks
for past performance within the last , years. It also needs to be relative to the
product-service we are trying to procure.
Price used to be the main object, now we want a (buy best vaue(
concept where price is just one factor. &e aso oo! at past
performance, management, etc. &hat e)ampes do you have about the
way you contract your wor!"
This really depends on what type of business you are running and what type of
customers your have to please and satisfy. 8or e0ample, if you are in a business
that is all customer satisfaction based, then you would most likely look for a
receptionist who has a lively smile and is great with people, making them feel
welcome when walking into your place of business. 'ne the +ip side, if you run a
company where you are shipping out merchandise from warehouses, you are
going to want to move more toward the more reliabe contractors and drivers to
deliver your products in a safe and e1cient manner.
I would think if you had a huge pro)ect to get done (uickly in a timely manner,
take for e0ample an architecture and engineering rm contracts work for a large
manufacturer, they would want a contractor to have enough manpower to get
the )ob done, safely and on time. !4afety!...this can also help you get contracts,
some contractors whoDs price is high but has an e0cellent safety record could be
considered !buy best value!.
&hat are the si) steps you woud ta!e in the project procurement
management"
5e can use the following steps in procurement management:
<. .lan purchases and ac(uisitions
=. .lan contracting
,. 7e(uest sellers response
>. 4elect sellers
?. Contract administration
A. Contract closure
<. .lan purchases and ac(uisitions - identies which pro)ect needs can best be
met by purchasing or ac(uiring products, services, or results outside the pro)ect
organi/ation, and which pro)ect needs can be accomplished by the pro)ect team
during pro)ect e0ecution. This process involves consideration of whether, how,
what, how much, and when to ac(uire.
=. .lan contracting - The process of recording items in one convenient and
easy to document location.
,. 7e(uest sellers response E this is typically conducted in the form of a
written re(uest via electronic mail, traditional mail, and or fa0.
>. 4elect sellers - This is the decision making process, and it enables those in
management to more (uickly choose the best seller for his specic needs. The
faster the selection can be done, the sooner work can continue on the pro)ect.
?. Contract administration - refers to managing the direct relationship
between the buyer and the seller.
A. Contract closure - the process of completing all tasks and terms that are
mentioned as deliverable and outstanding on the initial drafting of the contract.
$ll payments, including any nal post-deliverable payment, must have been
received by the seller, before a contract can o1cially be considered closed.
http:--pro)ect-management-knowledge.com-denitions-c-contract-closure-
In this era of cost containment and reduced budgets, we have seen a
movement towards awarding projects based on owest cost as opposed
to best vaue. And many times it goes without saying * (you get what
you pay for.( &hat can the contract manager do to ma!e sure he+she is
$scay responsibe without faing into this trap" &hat about the
project manager"
I beleive that the contract manager can work with the pro)ect manager in order
to best provide the best product for the best price. Cost management with a
focus on the best bang for your buck is the goal. There are areas where you will
be able to cut cost but you need to make sure you understand what the nished
product is going to look like when you are done.
4omething that both the contract manager and pro)ect manager can do to not
buy cheaper, but buy ine0pensive instead, is to research the costs that would
come with having to 0 issues that may come up in the contract process. To
make sure that they arenDt spending more money by taking the cheaper option.
,o you thin! that the cost associated with project panning is a !ey
reason why $rms do not underta!e the important eement of project
and contract management" -r, do you fee it.s just that project panning
is a new part of business+operations panning and management is not
totay famiiar with"
I think that pro)ect planning is a key element in pro)ect and contract
management. The pro)ect plan typically includes: pro)ect management, denition
of specic vendor tasks with milestone and deliverable dates, implementation
schedules, the creation of a test environment, roll-out, identication of necessary
assets, documentation, and training. .ro)ect plan consider the various
contingencies that may arise over the long term. .ro)ect cost over-run of poor
pro)ect planning can be far more than the cost of pro)ect planning. 4o, in my
opinion, the manager should always have the pro)ect planning as a key element
in the pro)ect and contract management.
.ro)ect planning is (uickly becoming one of the most vitals aspects of pro)ect and
contract management. 8or any pro)ects of signicant si/e, the cost of planning is
clearly o"set by the benets that result from having a well-thought out and
detailed pro)ect plan Fincluding ob)ectives, management practices, organi/ation
structure for the pro)ect-contract, budget, schedule, monitoring and control
practices, resource utili/ation, and sta1ng planG.
I think the new wave of middle management strongly believes in this, and as
many of you have pointed out, we will very likely see much better thought-out
pro)ects, well managed and well planned. $nd ultimately, this will only lead to
more successful pro)ects.
The contract manager is responsible for reviewing and supervising the contract.
$s the pro)ect manager, I would want the contract manager to be involved in the
pro)ect as soon as the contract was signed. It is typically the contract managerDs
)ob is to oversee the contract once there is an agreement. I would want constant
communication from the contract manager with, depending on the length of the
contract, at a minimum I would want a weekly status update. The contract
manager would be responsible for all items in regards to the contract, but all
con+icts should be reported to the pro)ect manager for nal resolution.
6oth the contract and pro)ect managers must be involved from the planning all
the way to the implementation and the evaluation stages. 5hile the pro)ect
manager main focus is implementation, scope, e1ciency and time management,
the contract manager is in charge of keeping control on the legal aspects,
budget, contract parameters and to evaluate that the results are in line to
determine penalties, reductions or awards. 'n the same token, as a pro)ect
manager clear and often communication with the contract manager is key in
reaching goals, understanding the legality of the pro)ect and staying within
schedule. The communication with the vendor-contractor though I believe should
be in most cases directly with the pro)ect manager. $lthough the contract
manager is the one who writes the contract, and authori/es the budget, keeping
a streamlined communication would avoid misunderstandings or confusing
messages.
-ne way to stay on (overhead( is to have the project manager pay both
the PM roe as we as the roe of the contract manager. &hat are some
of the potentia probems with this scenario" ,oes si/e or compe)ity of
the contract matter"
I think there can be a problem anytime that the .# doesnDt correctly identify the
magnitude of the pro)ect. I believe if the pro)ect is large i think it is always good
to hire a contract manager to alleviate some of the work load. The .m should
always be in control of the entire pro)ect, but sometimes you need to let other
contractor handle other aspects of the pro)ect. The pro)ect could fall behind in
other areas because the .# is focusing his time on negotiating the right contract
for the pro)ect. I do think that si/e and the comple0ity of the contract do matter
because the contract #anager has a better insight on what to e0pect when
trying to get the best contract for the pro)ect.
8or a small si/e pro)ect, Fe.g. less than H<IIIG a pro)ect manage can wear the
hat of contract manager. It will be more e1cient that way. 8or a mid-si/e to
large-si/e pro)ect, it is the best to have a contract manager in addition to a
pro)ect manager. $ good contract manager usually holds knowledge of legal
terms that are curial in a mid to comple0 pro)ects. 8or a business, a worst
scenario would be when a legal case is brought to court that might e0haust
company;s resources to come to a resolution with all parties involved.
Jiven that the U.4. spends H=., trillion on pro)ects, which is e(ual to one-(uarter
of the nationDs gross national product, I believe that corporations, government, to
non-prot organi/ations need to be conversant with and use of modern pro)ect
management to be e1cient. There are very few that still donDt use .#
techni(ues. .ro)ect-business planning is to guide pro)ectDs e0ecution, which must
be realistic and useful. It will be very di1cult for an organi/ation to operate
without a plan, maybe that is the reason some pro)ects fail. 8or instances without
a plan it is not possible to anticipate task dependency and this can cause idle
time, and it may not be possible to mitigate risk. CommentsK
Jiven that all of you fall within this new wave of middle management, it has
been reassuring to hear your discussions on this topic. Lou have shown some
great thinking in this area of pro)ect management, and it has been a real
pleasure guiding and participating with you on these discussions.