Mohamed HassanProject Management Consultant, Author and Speaker| LIFELONGKuwait, Kuwait
Working in time and material contracts is suitable for many types of work like Project Management Consulting. But, it may include ethical problems because while the customers are looking for value delivery, some consulting firms may look at how many hours they must spend to achieve the target profit.
So I think it is more ethical if the project management consulting contracts become based on the agreed values between the customer and PM Consultant rather than how many hours they spend.
Are you agree with this? And if you agree, how can they define the values? And what can we do with the customer who needs to see the consultants physically on the site even if they have nothing to do? Saving Changes...
Mohamed HassanProject Management Consultant, Author and Speaker| LIFELONGKuwait, Kuwait
Dear Kiron,
The value is very subjective, and it differs from one person to another, so, as you said, it should be defined and agreed on before starting the job. If the consultant succeeds in providing value, they can have more business from the current customers.
Thank you for sharing your thoughts Saving Changes...
Mohamed HassanProject Management Consultant, Author and Speaker| LIFELONGKuwait, Kuwait
Nov 02, 2022 2:50 PM
Replying to Rami Kaibni
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Mohamed
In the consulting firm I work with, we do bill based on hourly basis BUT in ur contracts, we agree with the client on an upset maximum that can be billed monthly. This upset maximum defines the boarders within which we work.
RK
Dear Rami,
Thanks for sharing your experience, this is like T&M with a cost ceiling, which reduces the risk to the customer, based on my understanding still, there is no agreement on the value that the customer expected from this job, but I think your customer will not pay monthly unless he gets value otherwise the customer stop the work.
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1 reply by Rami Kaibni
Nov 04, 2022 7:53 PM
Rami Kaibni
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The value is what is agreed to in the main contract. Even for T&M agreements, we do sign a formal CCDC 5B Contract with the CM which has everything defined with all expectations of value and outcomes.
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Nov 04, 2022 12:09 PM
Replying to Mohamed Hassan
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Dear Rami,
Thanks for sharing your experience, this is like T&M with a cost ceiling, which reduces the risk to the customer, based on my understanding still, there is no agreement on the value that the customer expected from this job, but I think your customer will not pay monthly unless he gets value otherwise the customer stop the work.
The value is what is agreed to in the main contract. Even for T&M agreements, we do sign a formal CCDC 5B Contract with the CM which has everything defined with all expectations of value and outcomes. Saving Changes...
Albert AgbemenuManaging Director| Seag Focus Ghana LtdAccra, Ghana
Great topic, Mohamed. I have had to deal with this situation a number of times. The way we have found around it is to work around the time and materials by first working with the customer to develop the scope for the project which then becomes the Terms of Reference (ToR). The PM then uses the ToR to prepare a technical proposal which will contain information on the general approach to executing the assignment, the methodology that the PM is proposing to undertake the assignment, the work plan which also includes the resources and time requirements for undertaking the assignment. Having gone through this process, a cost breakdown of all these resources required for the assignment is put together with the time allocations. Once this is done, it now forms the bases for a price proposal for the assignment. In this case the customer is no longer too worried about the cost impact on him/her as the PM has no motivation to spent too much time on the project. In fact, the PM is now rather motivated to complete the assignment in a timely manner in accordance with the customers requirements as agreed from the outset.
This topic can sometimes become a big dilemma for both parties. Thanks for bringing this up… Saving Changes...
Latha Thamma reddiSr Product and Portfolio Management (Automation Innovation)| DXC TechnologyMckinney, Tx, United States
The PM then uses the ToR to prepare a technical proposal which will contain information on the general approach to executing the assignment Saving Changes...
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