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Options and Ethics for project managers_How do you proceed?
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You are the project manager and your project is not going well. Not only your project is having cost and schedule problems, but also the customer is not satisfied with the quality of the products your team has produced so far. One of the major problems is a subcontractor who is responsible for a key subsystem.
Your brother-in-law owns a company that does exactly that kind of work and you know that he and his team would probably do better than your current contractor would.
How do you proceed?
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The moment you say "brother-in-law", there is a potential conflict of interest. That doesn't mean he wouldn't be a lot better for the project, but you need to be careful to demonstrate that any changes are justified on a strictly business basis.
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Thank you Lily for sharing this problem. It seems that the project manager in this case has a multitude of challenges, Cost, Schedule and Quality resulting in an unhappy customer.
- A health check/review of the project would be a good start to get a better understanding about the root causes and address them. A quick fix that seems to be presenting itself in the form of brother-in-law owned company might introduce another set of risks that have not been captured nor mitigated. The Conflict of Interest as stated by Keith is the most obvious. This will result in more questions than answers, and would include:
- Was the quality discussed with the subcontractor to enable a solid understanding and an opportunity to rectify? Are there any communication issues that need to be resolved before any other alternatives are considered?
- Given that this is not the only issue, what are the other steps that the project manager work with the all stakeholders/team/subcontractors to identify the root cause and get champions to assist with rectification?
- What are the terms and conditions of the contract with the subcontractor?
- What are the cost and impact of discontinuing with the subcontractor at this stage of the project?
- Are there any other subcontractors (other the brother-in-law) who would be able to undertake that part of the project?
- Are there any policies and guidelines that need to be adhered to eliminate and potential and perceived “Conflict of Interest”?
As the project manager navigates this tricky situation, they might be better off focusing on rectifying the situation with the subcontractor, keeping away for Conflict of Interest situations while delivering the project successful outcomes. Should the brother-in law company be the only solution, my suggestion to step aside and let someone else manage the project and the relationships.
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You can present the option and disclaimer to the company, while ensuring total transparency. You are not to decide if it is a conflict of interest, the company will decide that, if and when you provide full disclosure.
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Hi Lily: Great question!
As Amany elaborated, there are several serious issues the PM is facing in this fictional situation.
Since the project is already struggling, it is critical to take quick remedial action.
It is obvious that the non-performing contractor is certainly affecting the project. However, that is not the one reason.
The Project Manager may be very tempted to consider an alternative contractor, but considering his/her brother-in-law's company is dangerous.
PMI's Code of Ethics and Professional Conduct ( http://pmi.org/ethics ) clearly states that PMs should steer clear of Conflicts of Interest (COIs) AS WELL as POTENTIAL COIs.
This has already been pointed out by Keith Novak and Sante Vergini here.
In the current situation, it would be best to first find ways to improve the current vendor's performance: Finding a new vendor and getting them up to speed can cost the project.
If that is not possible, the PM should make every effort to conduct a larger search for replacement vendors with clearly-defined selection criteria.
As a very last option, if the brother-in-law's firm will be in the race, the PM needs to clearly communicate the potential COI and stay completely away from the selection process!
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Hi Lily,
very interesting question.

First of all, I would have a talk with the subcontractor, trying to understand if they aware of the issues, and the impact on the project: are they able to commit to a quick recovery plan?
In the meantime, I would start investigating other vendors and defining selection criteria; I would involving another person to interview several subcontractors (including your brother-in-law), disclosing with this other interviewer your relationship with your relative's team.
In this way, you may be more confident about not be biased and avoiding conflict of interest.
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@Keith, thank you for your reply. Project managers need to recognize or be able to sense a conflict of interest (COI) or a potential conflict of interest (see PMI's Code of Ethics and Professional Conduct ( http://pmi.org/ethics ) ).
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@Fabio, thank you for your reply and for your practical perspective. The approach you are suggesting may be the path to redress.
This project manager has a "full plate", with issues that require attention, among which to save the project, avoid real or potential conflict of interest, and address the lack of satisfaction of the customer, Whatever solution is adopted the project manager needs to be fully accountable for its action and decisions, conduct his action ethically.
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@Sante, thank you for your reply.
The approach you are suggesting may be suitable, based on the internal policies of the company, potentially in the private sector. The project manager needs to be ready to be accountable for his actions, and respond to any conflict of interest questions/concerns.
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@Amany Nuseibeh: Great insight, Amany, and a good details analysis, thanks. Indeed, besides the numerous issues related to the current status of the project, the project manager needs to stay away from any perceived or real conflict of interest, or any other unethical situation. The PM has to analyze the situation, make some good decisions, and act in order to save the project. The PM needs to comply with the procurement process that the organization has in place and to use the existing governance in place (if any) to consider the facts of the situation.
Network:988



@Karthik Ramamurthy, thanks for the feedback, well-thought course of action presented here, and good advice for the PM.
The contractual agreement in place is one of the first tools that the PM may have at his /her disposition in order to remediate the situation. Legal directions can also be taken and this is a decision that PM needs to make once the solution (s) to save the project have been identified. Avoiding at any point in time the real or perceived Conflict of Interest is a key consideration.
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