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Topics: Agile, Leadership, Organizational Project Management
Knowledge of the contracts in the project.
How much influence does the project manager not know the contract?
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Jorge -

Are you asking how much influence a PM will have over the contract? As usual, it depends. Ideally a PM is heavily involved in the development of a contract with a third-party provider, but sometimes they have to work at an arms length through their company's procurement or vendor management department which may or may not be aligned with the PM's needs and wants.

Kiron
It will depend on your internal processes.

In some places I have worked, the contract itself is limited information and never available to the PM. It includes more than the product expectations and might include multiple projects under a single contract. That can influence stock prices, so the contents are very tightly controlled. There is some type of additional document derived from the contract which is provided to the design teams, including the critical items like customers requirements for the end product and the delivery schedule.

In other places, as the PM I created all the project kick-off documentation from the contract itself. In that case, you very much need to understand the contract. I have found multiple contradictory delivery dates (of course the customer held us to the earliest) and the contract type such as Firm Fixed Price vs. Time and Materials can heavily influence how we execute the project.
Trying to adding something to great comments above in my case, and depending of the situation mostly aligned with @Kiron and @Keith comments, I always engage procurement and legal people in my projects/programs if applies. Mainly because I like to know what it really matters for the program or project. Usually it applies because, for example, if you are working with external resources perhaps you have to approve something each month then you need to know the basic conditions for doing the approval.
Hi Jorge,

my main job was to deliver service contracts IBM made with customers. I had to know the contract deeply, and there was a formal step called contract walkthru with the chief IBM negotiator for this. It should be that every line of the contract is read aloud and understood (by me). Could be 1 or 2 days for a typical 3-400 pages contract (excluding standard Ts&Cs).

Sometimes I was invited to the final negotiations, but the main purpose was to show the customer who I am and build trust, not my subject matter input.

And then I initiated and negotiated contracts with subcontractors. At best back to back plus some buffer.

Often the customer PM was less aware of contract provision than me. And always I tried NOT to refer to the contract afterwards, but build a base of trust, day2day procedure and guide the customer PM thru his environment. This even worked with a customer of lawyers, a Ministry of Justice.

Still keep a written record of contract deviations from both sides, sometimes called claim management, but do not put that up front.

Thomas
My experience is similar to that of Thomas.
PM's typically are selected after a (Customer) contract is signed. Thus, the future PM has not much say at that time. However, we would always insist that the PM should be thoroughly familiar with the contract that he/she will oversee. We certainly would try to get the anticipated PM (s) involved before a final sign-off.
Supplier contracts tend to be different, since typically at the time of a supplier contract the PM is the person in the company that is most familiar with the objectives.
In both cases, the PM would be heavily involved in the actual execution and liaison of the contract, including the charting of changes / revisions to a contract, incl. all financials. ( A contracts manager would typically oversee the PM though) With reference to Thomas' note on NOT referring to the contract: we used to tell the other party to a contract that, after signing, we throw it in the garbage can, for exactly the same reason Thomas described. ( we always kept that same garbage can close and within easy reach though)
Our Program Managers typically did not have signing authority though. However, in final negotiations the other party may not like it that the negotiating party does not have that authority, and may even insist. We had some typical wording in anticipation:, such as "subject to legal review" etc.

Roland
As a PM I like to have access to all information that may have an impact on my project including the contract that I may be working under and/or contracts put in place to assist in delivering the project. After all the PM is supposed to be "managing the project".

Keep in mind that contracts don't always align with shareholder's understanding of the project scope or undiscovered site conditions. This may lead to scope adjustments, contract changes, cost and time implications, conflicts, legal disputes, etc These need to be addressed in the Risk Management Plan and possibly Register.

Many companies keep project management and procurement at arms-length which typically means that the PM does not have contracting authority. This doesn't exclude the PM from being aware and involved in the process. They should be operating hand-in-glove. In an infrastructure initiative the PM would normally recognise or identify a contractual requirement and work with procurement to address the issue.
To me, the question is a little bit unclear. Anyway, Kiron and Keith made valid points.
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1 reply by Jorge Paz
Dec 21, 2021 3:34 PM
Jorge Paz
...
If a project has a contract and the PM (may have a supplier role) does not know its content, what will be the impact on the project.
Dec 20, 2021 8:39 AM
Replying to Abolfazl Yousefi Darestani
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To me, the question is a little bit unclear. Anyway, Kiron and Keith made valid points.
If a project has a contract and the PM (may have a supplier role) does not know its content, what will be the impact on the project.
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1 reply by Keith Novak
Dec 21, 2021 4:45 PM
Keith Novak
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That will depend on what relevant information the PM is missing.

There could be minor issues that cost time, money, and customer satisfaction. There could be major issues where the project is considered a complete disaster.

It is a bit like asking, what if the PM does not know the deliverables of the project.
Jorge -

A PM who doesn't have knowledge of a key contract on their project would likely incur a fair bit of risk due to the volume of unknown-unknowns which will be compensated for by making assumptions. I suppose in such a case, the PM could ask the powers that do have access to the contract to validate certain assumptions, but that would be an inefficient process.

It is reasonable that if there is an overall contract and the PM represents a firm delivering just a portion of the project scope (e.g. a sub-contractor) then he/she might not see the overall contract, but there should then be a separate contract covering the scope of the PM company's work which they do have full line of sight into.

Kiron
Dec 21, 2021 3:34 PM
Replying to Jorge Paz
...
If a project has a contract and the PM (may have a supplier role) does not know its content, what will be the impact on the project.
That will depend on what relevant information the PM is missing.

There could be minor issues that cost time, money, and customer satisfaction. There could be major issues where the project is considered a complete disaster.

It is a bit like asking, what if the PM does not know the deliverables of the project.
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