97 Things Every Project Manager Should Know

Chapter 54. Avoiding Contract Disputes

PMP. Jorge Gelabert

PROJECT MANAGERS WHO HAVE BEEN CERTIFIED as Project Management Professionals (PMP)® are familiar with the various types of contracts. They know that the type of contract to use depends not only on the products and services being purchased, but also on the level of risk they and the seller are willing to assume. What they may not always be aware of is that even the best contract does not guarantee that disputes will not arise.

Well-defined requirements are an obvious way of avoiding those possible conflicts. If the contract clearly defines what is expected, both parties will agree on what the deliverables will be. However, well-defined requirements are not always a reality in the world of project management. Some sellers (your sales team) may underbid a proposal with the expectation that the inevitable changes orders from the customer will allow them to recover the profit margin they are losing in order to get the business. Even when projects are bid well and there is a firm, well-defined agreement as to the project scope, changes may arise that both parties must address. These, and any number of other unique scenarios, can become possible areas of dispute.

So what can the project manager do? Approach the project with a mindset that the customer is a partner, not an adversary. If both the seller (you) and buyer (your customer) ...