Getting more from your contracts – spotting a troubled project
One challenge facing contract and project managers is how to improve their anticipation of problems. Contract administration was mostly a reactive discipline, reporting after the event. Contract management should be far more proactive, seeking to anticipate and remediate issues before they become major problems, leading to potential claims or disputes.
The question is, what are the warning signs? We recently posed that question to a group of experts within IACCM and they produced the following list – a sort of ‘top ten’, though in no particular order of priority. We plan to add to this list and increase its sophistication because it represents important knowledge and insight which may assist many in delivering greater value through improving project success – avoiding delays, budget overruns and quality defects.
Here is the list of things to watch out for, to measure or to test; please add to it, change it and comment upon it.
Actual versus plan cost or cash flow
Broken communications
Finger-pointing / blame
Lack clarity over authority / decision-making
Failure to maintain / update business case
Staffing not in accordance with plan
Disputes / disagreements over change
KPIs / measures inconsistent with goals
Poor or incomplete documentation
User dissatisfaction or disengagement
Commitment Matters 
good morning Tim
I suggest to add a new item: the behavior of the parties. After more than 40 years experience, in the international contracting business, I noted that the parties fail more and more frequently to behave as per the requirements of the contract. In particular, the one who got the money has the power and not infrequently disregards its implied obligation of cooperation. By way of example, a change order acknowledged by the owner, is signed by the owner after more than 52 weeks of lengthy and some time sterile discussions. Again, not infrequently, the change proposals are not discussed at the time the event occurred with the attempt to make an advantageous settlement at the very end of the project. Finally blackmail are also practices which are not so infrequent. It’s therefore very important for a contract manager to test, identify and anticipate about the expected behavior of the owner.
Hi Tim,
I would also add “wrong set of expectations (on both sides)” topic on the list. This one, together with broken or just poor communication is dramatically impacting the relationship. How many times are we leaving the other party with an expectation that is far from the reality? And then comes the frustration which is even harder to manage, very often leading to escalations and this well known question from the frustrated party: what haven’t you raised this point before?
Tim,
I would add Delays during execution as warning signs – For eg, if you are 10% short of the target date it could be a matter of concern
Some of your points like finger pointing or bad communication are perhaps the outcome when things go bad but how do we anticipate the problems ahead and try to resolve it.