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Topics: Agile, Change Management
Project charter versus contract when the sponsor is en external customer
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Is it advisable to have a project charter signed when the sponsor is an external client or is - it is better to wait until the management plan is advanced for sign a contract with him. 

I work for a web development firm. Difficulty is to charge the time of analysis and editing of the management plan afterwrds or in case the customer don't sign the contract.

Thank you for your help
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If you are working with an external agency , the first thing you would do after an initial (within reason) investigation phase (The time and effort involved here is to be borne by your employer as pre-sales budget) is agree to enter into a formal contract with your customer.

Typically, there has to be :-
A formal Statement of Requirements from the external Customer
A formal Statement of work from your end outlining what you will deliver in scope and what is out of scope with regards to the Requirements, timelines , costs, service level agreements, terms and conditions etc
Once both you and your customer agree on the statement of works, you both need to sign off on it which then authorizes your firm to start working on the project.

Your Statement of works should clearly outline the development of a Project Management Plan and the time and costs for such a plan . It should include certain contingency (10% as an example). you should also factor in timing to produce design documentation , schedules, attending meetings with customer, Reporting etc and mention it in the statement of works and then bill the customer accordingly so there are no surprises
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1 reply by Nelly Romand
Jan 16, 2019 7:00 PM
Nelly Romand
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Thank a lot for your answer. In software development the analysis phase often represents 30 to 40%, I wonder if it would be opportune to transform the analysis into a separate project
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A project charter is normally an internal document that allows a project team to be assembled and start booking time against a project code. A contract on the other hand is normally external and is a legally binding document. My experience is that a contract always supersedes project documentation such as SOW, charter, plan etc.

So a project charter can be approved by the sponsor (internal or external) before contract signature since it will allow the prep work to start and when the legally binding contract is signed the project can start. Sometime the project start prior to contract signature based on faith or LOI.
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1 reply by Nelly Romand
Jan 16, 2019 7:10 PM
Nelly Romand
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Thank Anton, your answer is very clear
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Agree with Anton
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You want to get the money as quickly as possible ; go for signature on the dotted line as quickly as possible.
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Nelly -

A charter is there to authorize the project's existence and to provide a very high level understanding of what the desired outcome is. Depending on the vendor situation I've found that a letter of agreement can act as a charter to authorize a limited amount of work to get to a detailed contract. In other situations this pre-contract work is considered presales and is the cost of doing business.

Kiron
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1 reply by Nelly Romand
Jan 16, 2019 7:14 PM
Nelly Romand
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Thank for your answer. effectively a letter of agreement may be responsive to my need.
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I would go with the project cycle. The project charter is better to be signed off at very first stage because it defines the project.
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Maybe the customer is not your project sponsor, but someone within your organization who gives you authority to implement the contract on behalf of your organization. The customer is the customer. The charter should include contract requirements PLUS any other stakeholder requirements.
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Jan 15, 2019 9:24 PM
Replying to Deepesh Rammoorthy, PMP®AgilePM®
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If you are working with an external agency , the first thing you would do after an initial (within reason) investigation phase (The time and effort involved here is to be borne by your employer as pre-sales budget) is agree to enter into a formal contract with your customer.

Typically, there has to be :-
A formal Statement of Requirements from the external Customer
A formal Statement of work from your end outlining what you will deliver in scope and what is out of scope with regards to the Requirements, timelines , costs, service level agreements, terms and conditions etc
Once both you and your customer agree on the statement of works, you both need to sign off on it which then authorizes your firm to start working on the project.

Your Statement of works should clearly outline the development of a Project Management Plan and the time and costs for such a plan . It should include certain contingency (10% as an example). you should also factor in timing to produce design documentation , schedules, attending meetings with customer, Reporting etc and mention it in the statement of works and then bill the customer accordingly so there are no surprises
Thank a lot for your answer. In software development the analysis phase often represents 30 to 40%, I wonder if it would be opportune to transform the analysis into a separate project
Network:0


Jan 16, 2019 1:28 AM
Replying to Anton Oosthuizen
...
A project charter is normally an internal document that allows a project team to be assembled and start booking time against a project code. A contract on the other hand is normally external and is a legally binding document. My experience is that a contract always supersedes project documentation such as SOW, charter, plan etc.

So a project charter can be approved by the sponsor (internal or external) before contract signature since it will allow the prep work to start and when the legally binding contract is signed the project can start. Sometime the project start prior to contract signature based on faith or LOI.
Thank Anton, your answer is very clear
Network:0


Jan 16, 2019 7:43 AM
Replying to Kiron Bondale
...
Nelly -

A charter is there to authorize the project's existence and to provide a very high level understanding of what the desired outcome is. Depending on the vendor situation I've found that a letter of agreement can act as a charter to authorize a limited amount of work to get to a detailed contract. In other situations this pre-contract work is considered presales and is the cost of doing business.

Kiron
Thank for your answer. effectively a letter of agreement may be responsive to my need.

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