Project Management Institute

In the loop


Make project managers a part of contract negotiations right from the start.


Almost every project has some element of contractual work, but many companies leave the project manager out of the loop until the deal has been signed and sealed. More mature organizations, however, are recognizing the value of bringing in project managers during negotiations with contractors.

Doing so adds to the quality and usability of the contractual work through an increased ability to:


Manage expectations from the outset

Establish relationships between the project manager and future colleagues

Manage succession planning, transition and project closure

Assess skills, training requirements and benefits

Define, establish and document project outcomes

Plainly state acceptance criteria, for both project deliverables and general conduct

■ Establish the project manager's ownership of the contractual relationship

■ Empower and engage project managers in the project foundation.

Applying tools developed by behavioral and social psychologist David McClelland can help focus attention on the varying needs and expectations of the parties involved in negotiations:

Need for Affiliation (n-Affil): The need to belong. In some organizations, this is simply a security pass or access to certain permission levels. At the other end of the continuum is the potential to be included in social events.

Need for Achievement (n-Achieve): The underlying need to achieve at a personal level and perform difficult tasks on a high level. In contractual environments, this includes the organizational need to be successful in financial, commercial, public and professional recognition areas.

Need for Power (n-Pow): The need to feel in control, directing and having charge of the context of the project, its outcomes and its progress. Access, cost and commercial organizational aspects are embedded in this category.

Contractual negotiations are often handled by the legal departments of the various parties involved—with little attention paid to the spirit of the contract, the intended outcomes of the project or even the individuals likely to participate in the endeavor. However, giving early consideration to working practices, communication, relationship-building and long-term outcomes can greatly facilitate project success and sustainable business partnerships.

To succeed in today's competitive environments, collaborating organizations need to create projects that have:

Clear boundaries

Documented and agreed outcomes

Defined durations and acceptance/quality criteria

An environment of trust

Agreed communication plans

Active risk management, issue management and escalation management processes

A sense of joint endeavor for successful project delivery.

And if everyone starts out as a team, you'll probably end up with a better result. PM

Sheilina Somani, PMP, is owner of Positively Project Management and vice president, education, for the PMI Diversity Specific Interest Group.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.




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