When Should a Contract Award be Treated as a Project?
Anonymous
I'm looking for some helpful feedback regarding contract awards and what key aspects should be considered when deciding if the scope of the award warrants handling the work as a formal project. We have contract awards that range from very small to very large in scale, yet every one has at least one and often several defined deliverables. Based on PMBOK principles, one could argue that every award should be handled as a project, but in a smaller company, this just does not seem like a prudent use of resources, even if project management principles are applied using a graded approach. Some awards represent such a low risk and require a LOE that just does not make sense.
I would appreciate hearing your perspectives on how you and your company decide when to handle a contract award as a project, and when you decide that level of effort is just not practicable. Saving Changes...
In one sense, a project is just a wrapper you put around work. The work needs to happen whether, or not, there is a project, and someone still needs to make sure the work is done. Even if the work does not need a project wrapper, there are likely still task assignments, due dates, and status updates.
So, let's change the question. Does every contract award need a project manager? Based on the information you've provided, I'm guessing not. But, what does it need?
In what other ways can you change the question to make sure the right people are giving the work the right attention? Saving Changes...
In general, whether work is stemming from a contract or not, most organizations will translate theoretical definitions for projects to an operating definition which is more objective. This is often cost or effort driven (e.g. any unique endeavor over 35 hours of estimated effort is a project) but might also include some other factors such as number of distinct stakeholders affected, level of risk or relative impact of outcomes on the organization's success.
In the context of a contract, you'd also want to consider how unique the scope of work is relative to the predictable service offerings of the company.
Normally, a contract is an agreement between a certain number of parties to perform a project or service. The fact that only a contract award needs to be treated as a project would include high level of complexity, several stakeholders working on it, and a considerable number of work hours, to justify this way of treating this process. Saving Changes...
You would first need to define a "formal project" since not all projects are treated the same. Often there is a threshold whether it is formal or informal, and once a project is launched, there may be different governance requirements for larger or higher risk projects.
Cost and duration are typical qualities that may set thresholds but not the only ones. Work that involves contracts with external suppliers, when regulatory agencies get involved, and work that falls under specific budget categories are other examples that may necessitate formal projects due to the governance processes involved.
Business management systems may also require creating projects to facilitate functions like tracking and aggregating key metrics or regular progress review cycles even if the work performed might not normally be considered a formal project. For less involved activities, they may not be treated with as much rigor, but at least need some basic information recorded to fit with the business systems. Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
One way to classify incoming contracts is according to size, in terms of person hours to be spent. Any contract/project requires a person assigned as responsible for delivery (best thru a charter) and another to be the owner of the contract (sponsor).
Class 1 (small) could be anything below a threshold that requires a full time project manager assigned, which could be above 60 PH per day, which is about 8 FTEs. Project managers typically are in charge of 3-10 such contracts, maybe with a shared team. These contracts may be short in duration, e.g. 6 months or less. Most Scrum contracts fall in this category, team is more important than
Class 2 (normal) from 8 FTEs, clearly defined deliverables.
Class 3 (exceptional), often handled as programs since they require often to be broken down in separate projects, success is defined by a set of interdependent expected benefits, a steering committee is required, they typically have 40+ FTEs and may take 2-3 years to complete. Saving Changes...
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