The contract as a project initiation document: are we missing something?

During a recent conversation with a project manager, we covered the lifecycle of the Statement of Work (SoW). We discussed the usual ground of the challenge in collecting the habits, old wives’ tales and superstitious practices that makes up a sizeable percentage of working processes and got to the stage of discussing the move of this work to a new provider.

To a project manager charged with this sizeable activity the contract, and in particular the SoW, is a goldmine. There are products, people and timelines. Risks, issues, constraints and scope. There are even performance targets, reporting, stakeholders and sponsors. Everything they could need to successfully define the project is there, right? Well yes, and no.

From the point of view of the SoW’s authenticity, the process of bidding and thereafter creating a contract is one of rationalising and sanitising. The process is a sieve, removing the ugly stones of an informal organisation, basic conflict between professional worker and the hierarchical management, strategic conflict and the gap between documented practice of an organisation and its culture. What is left is a pure process, a paper exercise. It is what we hope to see, but it is devoid of context. Some of the most vital predictors of success are sieved out and thrown aside. And there they stay?

It is often said that the only page needed in a contract is the signature page, and other pages only degrade the spirit of cooperation. The lawyers have an obligation to remove exposure to risk. Uncertainty is risk. The more we describe, the more we wish to explain, the more we pin down, and the less connected to the reality of their organisation a customer’s SoW becomes. It is the law of diminishing returns.

Previously we discussed the idea of using a Request for Solution, which is a sound option to avoid pinning the butterfly down with nails. There is also the alternative of recognising context of delivery in our project.

We must recognise that it is for the benefit of the provider to have a customer that can realise actual value from services, and naturally that is of benefit to the customer. This is not the ground of contracted pre-requisites, but that of MAB (Mutually Assured Benefit). Both parties must recognise that change to behaviour and culture in a customer’s organisation are of vital importance to the success of the deal, and are of mutual benefit. Such objectives cannot come from the contract. The project plan must include ‘deliverables’ which are not 100% controlled, rational or predictable.

Yes, Service Providers, take a deep breath, it’s the first day of a partnership.

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