(^108) 97 Things Every Project Manager Should Know
Avoiding Contract
Disputes
Jorge Gelabert, PMP
Berlin, Connecticut, U.S.
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 con-
flicts. 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) are invested in the success of the project, disagreements that
arise can be easily and amicably resolved. If each side is too focused on its
own interests, small disagreements can evolve into major conflicts and derail
a project.