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Categories: Agile

By Lynda Bourne

Agile in its various forms is becoming mainstream, and this means an increasing number of commercial contracts are being delivered by contractors who either choose, or are required, to use an agile methodology to create their contracted deliverables. While this is probably a good thing, this shift in approach can cause a number of problems. This post is a start in looking for practical solutions to some of these issues.

Two of the core tenets of agile are welcoming change to add value, and working with the client to discuss and resolve problems. While these are highly desirable attributes that should be welcomed in any contractual situation, what happens when the relationship breaks down, as it will on occasion?

The simple answer is that every contract is subject to law, and the ultimate solution to a dispute is a trial—after which a judge will decide the outcome based on applying the law to the evidence provided to the court. The process is impartial and focused on delivering justice, but justice is not synonymous with a fair and reasonable outcome. To obtain a fair and reasonable outcome, evidence is needed that can prove (or disprove) each of the propositions being put before the court.

The core elements disputed in 90% of court cases relating to contract performance are about money and time. The contractor claims the client changed, or did, something(s) that increased the time and cost of completing the work under the contract; the client denies this and counterclaims that the contractor was late in finishing because it failed to properly manage the work of the contract. 

The traditional approach to solving these areas of dispute is to obtain expert evidence as to the cost of the change and the time needed to implement the change. The cost element is not particularly affected by the methodology used to deliver the work; the additional work involved in the change and its cost can still be determined. Where there are major issues is in assessing a reasonable delay.

For the last 50+ years, courts have been told—by many hundreds of experts—that the appropriate way to assess delay is by using a critical path (CPM) schedule. Critical path theory assumes that to deliver a project successfully, there is one best sequence of activities to be completed in a pre-defined way. Consequently, this arrangement of the work can be modeled in a logic network—and based on this model, the effect of any change can be assessed.

Agile approaches the work of a project from a completely different perspective. The approach assumes there is a backlog of work to be accomplished, and the best people to decide what to do next are the project team members when they are framing the next sprint or iteration. Ideally, the team making these decisions will have the active participation of a client representative, but this is not always the case. The best sequence of working emerges; it is not predetermined.

There are some control tools available in agile, but diagrams such as a burndown (or burnup) chart are not able to show the effect of a client instructing the team to stop work on a feature for several weeks, or adding some new elements to the work. The instructions may have no effect (the team simply works on other things), or they may have a major effect. The problem is quantifying the effect to a standard that will be accepted as evidence in court proceedings. CPM has major flaws, but it can be used to show a precise delay as a specific consequence of a change in the logic diagram. Nothing similar seems to have emerged in the agile domain.

The purpose of this post is twofold. The first is to raise the issue. Hoping there will never be a major issue on an agile project that ends up in court is not good enough—hope is not a strategy. The second is to see if there are emerging concepts that can address the challenge of assessing delay and disruption in agile projects. Do you know of any?

Posted by Lynda Bourne on: March 16, 2023 01:11 AM | Permalink

Comments (5)

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Dear Lynda
Very interesting the theme that brought to our reflection and for debate
Thank you for sharing and for your concerns.

My view is that it is the customer and/or the owner of the product who defines the priorities (supposedly he is always in contact with the customer) and the team accepts or not to carry out a certain amount of work in a given time

Contact with the customer must remain constant when you choose to use an agile approach

Dear Lynda
Thank you for raising the issue of assessing delay and disruption in agile projects in the context of contractual disputes.
In my opinion, it is worth mentioning that the Agile approach is intended for complex situations where delivering value to the customer step by step is crucial. Unfortunately, some organizations adopt Agile practices without considering whether it's suitable for their context. This can lead to problems when it comes to contractual disputes.

Choosing the right development approach is critical to avoiding these problems. It's important to consider the nature of the project and whether a pure Agile approach is appropriate. As Luis mentioned, Communication and engaging stakeholders are also key success factors in an Agile environment.
In an Agile environment, metrics like cycle time, lead time, velocity, and burn-down charts can be used to track progress and identify potential delays early on. By tracking these metrics, project teams can identify potential delays and work to mitigate them before they become significant issues.
In some cases, a hybrid approach may work better than a pure Agile approach and this approach can help address some of the limitations of both methods and provide a more comprehensive way to assess delay and disruption. Therefore, it's important to carefully consider the project's unique characteristics and choose the development approach that best fits those requirements.

Two excellent comments, but you need to remember at least 50% of the people in any court case don't want to be there, sometimes more.

Dear Lynda
What is the type of contract to conclude between the parties? Time and Materials
If the customer:
1. Set priorities for each iteration
2. Only pay the outstanding amount after delivery accepted in each iteration
3. If this is made explicit in the contract entered into between the parties

Significantly reduces the likelihood of court disputes

Hello Lynda,

Thank you for tabling an important discussion. Whilst "agile" in its many guises has ushered in many frameworks, approaches and methods, it also predicates careful consideration of human interaction, dialogue and understanding.

As Mehdi pointed out, stakeholder input and expectation will play a vital role in shaping the approach to the work and the expected outcomes. It would be pointless to insist on an "agile" approach if the sponsor or critical stakeholders were to insist on a predictive approach. Project professionals are expected to demonstrate benefits and disbenefits associated with each and work within the client's risk appetite.

As you say, the courtroom is the last place both parties wish to be in so it's in the interest of both to proceed in the best manner possible to avoid or at the very least, do everything possible to mitigate that risk.

Kind regards,

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