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Managing Contractors through Assessment or Audits

PM ADVISORY

By Raju Rao, PMP, SCPM, PMI – OPM3- CP    

Chennai, India
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Introduction 

Managing Contractors ( which includes vendors and suppliers ) has been challenging particularly for large and mega projects. It is well accepted that one of the main functions of a project manager is contract administration , however how much emphasis or attention is given to it ? Success in project outcomes for many projects are heavily dependent on how well contractors perform but possibly project managers find it difficult to  manage the project as well as the contractors . One way to address this issue is to assess the processes followed by a contractor and use them as a basis for standardization and improvement . This article will present some thoughts on this subject which if implemented could improve the management of  contractors.

Project Management and Contractors  –  the connection  

Many projects – particularly those which are large or of a mega size have challenges in managing contractors ( can also be vendors , suppliers and sub-contractors ) . In some cases projects are managed by a consortium or a holding company and the actual implementation is carried out by contractors , thereby success of a project in such cases is significantly dependent on the performance of the contractors.

Project management standards, for example the PMBOK Guide 4th edition specify Contract Administration as one of the processes in a project. This is to be performed by the Project Manager and if we get into the details of this process than we can see that this has all the ingredients of project management and can be considered in effect mini or sub project management. So ideally speaking the contractors should be following processes based on project management standards and be guided by it as much as the main project itself. Does this happen? Quite often not , but when it does happen it is because the project organization and the contractors are equally competent in processes and they are able to communicate and project control takes place effectively.  So, when this is not so and contractors do not have the requisite processes it remains as a bottleneck while managing them.

Normally project organizations face many challenges when dealing with contractors while implementing projects? These could be…

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About the Author

Raju-Raoflag-indiaRaju Rao         

Raju Rao, PMP, SCPM, OPM3CC is principal consultant with Xtraplus Solutions, a PM consulting and training company based in Chennai, India.  Mr. Rao has a B.Tech degree in Chemical Engineering from the University of Madras, India; a Diploma in Management from the University of Bombay; an Advanced PM certificate from Stanford University; and a certificate from IIM Calcutta. Mr. Rao has over 30 years’ experience in engineering, process and project management and has been an active member of PMI for several years. He held leadership positions in both the 1st and 2nd edition projects of OPM3 and has been involved in development of several PMI standards.  He has presented numerous papers in global congresses and is the co-author of two books – Project Management Circa 2025 published by PMI and Organizational Project Management published by Management Concepts, USA.   Raju is President of South India section of AACE International and founder of the Indian Project Management Forum. Raju Rao lives in Chennai, India and can be contacted at [email protected].