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Topics: Procurement Management, Quality, Risk Management
When you decide to subcontract instead of being your team doing the work
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When you decide to subcontract, instead of being your team doing the work, do you take any action?
If so, which one?
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Luis -

can you clarify the question?

There would certainly be a number of different activities performed when engaging a third party compared to use of internal staff, but what are you specifically asking about?

Kiron
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1 reply by Luis Branco
Sep 24, 2019 10:43 AM
Luis Branco
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Dear Kiron
I am specifically referring to subcontracting the realization of a deliverable (product, service) that will integrate the final product of the project.
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Typically, PM's employ several contractors within our organization adding up to the several hundreds. Because of the complexity involved from both a programmatic point of view and technical perspective, it is unlikely that those skill sets are sufficient across the organization. This includes staff from schedulers, engineers, procurement, contracting, SME's, etc.
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1 reply by Luis Branco
Sep 24, 2019 10:47 AM
Luis Branco
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Dear Steve.
We agree.
What type of measures does it take to ensure that subcontract results meet deadlines, are delivered according to cost, scope and negotiated quality requirements?
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Sep 24, 2019 7:09 AM
Replying to Kiron Bondale
...
Luis -

can you clarify the question?

There would certainly be a number of different activities performed when engaging a third party compared to use of internal staff, but what are you specifically asking about?

Kiron
Dear Kiron
I am specifically referring to subcontracting the realization of a deliverable (product, service) that will integrate the final product of the project.
Network:2994



Sep 24, 2019 8:07 AM
Replying to Steve Ratkaj
...
Typically, PM's employ several contractors within our organization adding up to the several hundreds. Because of the complexity involved from both a programmatic point of view and technical perspective, it is unlikely that those skill sets are sufficient across the organization. This includes staff from schedulers, engineers, procurement, contracting, SME's, etc.
Dear Steve.
We agree.
What type of measures does it take to ensure that subcontract results meet deadlines, are delivered according to cost, scope and negotiated quality requirements?
...
1 reply by Kiron Bondale
Sep 24, 2019 5:33 PM
Kiron Bondale
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Luis -

Think of the work packages done by the sub-contractor as a mini-project and as such they would need to have baselines for scope, schedule, cost & quality defined the same as for the overall project. Those can then become the basis for performance assessment.

Kiron
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I still do not get the question. Could you elaborate more Luis ? Thanks.
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In theory, most if not all contract clauses for contract personal are "tasked" based. Meaning, contractors are to be tasked specifically by the technical authority who reviews and approves their work. In reality, this is the exception rather than the rule based on my experiences. Having said that, contractors that have worked for me produce a weekly timesheet of activities that I review and approve for billing purposes. Most are "tasked" but usually not in written format.
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If I understand your question correctly, Luis, you are interested in outsourcing managed work to a supplier. You outsource work that is outside of your core competencies.

As a company, you should have a set of competencies that distinguish you from your competitors and your partners. Anything else should be considered a potential candidate for outsourcing, if the value provided outweighs the cost.
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Sep 24, 2019 10:47 AM
Replying to Luis Branco
...
Dear Steve.
We agree.
What type of measures does it take to ensure that subcontract results meet deadlines, are delivered according to cost, scope and negotiated quality requirements?
Luis -

Think of the work packages done by the sub-contractor as a mini-project and as such they would need to have baselines for scope, schedule, cost & quality defined the same as for the overall project. Those can then become the basis for performance assessment.

Kiron
Network:582



I have seen companies assign overflow work to external contractors .

For example , Management determines that a certain project is on the strategic road-map and needs to be delivered within the next calendar year but the current internal staff are busy executing other projects . A call may then be made to source external staff or agencies to help deliver that strategic project.

The company may then get it's support staff trained on the new capability as part of operational handover.

The other scenario is like someone already mentioned . When you do not have internal skills to help deliver portions of a larger project and you need to sub-contract that work out to other agencies.
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When the requirements for a project have been thoroughly defined and scoped and the necessary in house resources do not exist in order to implement the project, then subcontracting is a good fit in order to fulfil the requirements of the project. One note of caution is to make sure all deliverables are included in the final total cost of the implementation of the project as some subcontracting companies make most of the profit from add on's that were not included in the original costing of the project.

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