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Thinking in Contracts

SERIES ARTICLE

The role of intelligent procurement in projects

Advances in Project Management

By Prof Darren Dalcher

Director, National Centre for Project Management
University of Hertfordshire

United Kingdom


Contracts, the legal documents capturing the formal agreements between people, parties or groups, are often of little interest to project managers. Devised by solicitors and lawyers, they tend to emphasise the enforcement of promise-based obligations to perform a particular duty, supply certain goods, provide a given service or commit a specific act. Contracts are typically phrased in a legal language that endeavours to identify all contingencies and deliver a legally binding and enforceable agreement.

The Sixth Edition of the APM Body of Knowledge focuses on contracts under the Resource Management section, which is concerned with the acquisition and deployment of internal and external resources required for delivering the project or programme. The APM Body of Knowledge defines contracts as the “agreement made between two or more parties that creates legally binding obligations between them … and sets out those obligations and the actions that can be taken if they are not met” (p. 202).

Contracts are covered by contract law, governed and determined by local jurisdiction. The Body of Knowledge therefore recommends that specialist advice should be sought to interpret and understand the legal ramifications of the contract. Given that contracts are invoked when actions, goods or services are required from outside the host organisation, local legal experts need to be involved in drafting the contracts and interpreting their implications.

The fifth edition of the PMI Guide to the Project Management Body of Knowledge includes a wider knowledge area focused on project procurement management, which is defined as the “processes necessary to purchase or acquire the products, services or results needed from outside the project team”. Accordingly, procurement management is therefore concerned with establishing, maintaining and closing relationships with suppliers of goods and services for the project.

Sustaining Interest

One view within the project contract community is that contracts should be completely comprehensive, encompassing all potential contingencies. When uncertain events occur, disputes can easily translate into legal teams quarrelling about interpretation, agreement and expectations. In large and complex undertakings, that can often use up valuable time and resources. An alternative approach is to develop sustainable long term relationships, supported by more flexible definitions that allow both parties to continue to operate and negotiate workable solutions. A lot depends on the context and cultural expectations of participants and the cultural and sectoral preferences enacted by an industry or an organisation in order to address the partnerships required to deliver projects.

In delivering a new vision for IT project development, The Agile Manifesto offers an interesting distinction, suggesting that experience indicates that a better way of developing software is through coming to value customer collaboration over contract negotiation. If collaboration is viewed as a long-term strategy, it can trump adherence to contracts and encourage a more flexible interpretation of objectives and duties based on the need to sustain the relationship and deliver meaningful and useful increments of value.

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To read entire article (click here)

 

Editor’s note: The PMWJ Advances in Project Management series includes articles by authors of program and project management books previously published by Gower in the UK and now by Routledge.  Each month an introduction to the current article is provided by series editor Prof Darren Dalcher, who is also the editor of the Gower/Routledge Advances in Project Management series of books on new and emerging concepts in PM.  To learn more about the book series, go to https://www.routledge.com/Advances-in-Project-Management/book-series/APM. Prof Dalcher’s article is an introduction to the invited paper this month in the PMWJ. 

 


 

About the Author

pmwj36-Jul2015-Dalcher-PHOTO
Darren Dalcher, PhD

Series Editor
Director, National Centre for Project Management
University of Hertfordshire, UK

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Darren Dalcher
, Ph.D. HonFAPM, FRSA, FBCS, CITP, FCMI is Professor of Project Management at the University of Hertfordshire, and founder and Director of the National Centre for Project Management (NCPM) in the UK.  He has been named by the Association for Project Management (APM) as one of the top 10 “movers and shapers” in project management in 2008 and was voted Project Magazine’s “Academic of the Year” for his contribution in “integrating and weaving academic work with practice”. Following industrial and consultancy experience in managing IT projects, Professor Dalcher gained his PhD in Software Engineering from King’s College, University of London.  Professor Dalcher has written over 150 papers and book chapters on project management and software engineering. He is Editor-in-Chief of Software Process Improvement and Practice, an international journal focusing on capability, maturity, growth and improvement. He is the editor of the book series, Advances in Project Management, published by Gower Publishing of a new companion series Fundamentals of Project Management.  Heavily involved in a variety of research projects and subjects, Professor Dalcher has built a reputation as leader and innovator in the areas of practice-based education and reflection in project management. He works with many major industrial and commercial organisations and government bodies in the UK and beyond.  He is an Honorary Fellow of the APM, a Chartered Fellow of the British Computer Society, a Fellow of the Chartered Management Institute, and the Royal Society of Arts, and a Member of the Project Management Institute (PMI), the Academy of Management, the Institute for Electrical and Electronics Engineers, and the Association for Computing Machinery. He is a Chartered IT Practitioner. He is a Member of the PMI Advisory Board responsible for the prestigious David I. Cleland project management award and of the APM Professional Development Board.  Prof Dalcher is an academic editorial advisor for the PM World Journal.  He can be contacted at [email protected].

To see other works by Prof Darren Dalcher, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/darren-dalcher/.