How to Manage a Project

Carrying out a Project

Additional Materials

Managing Contractors

For some projects the bulk of the work will be carried out by contractors and in this situation, success depends on how well those contractors are selected and managed. In this situation, the Project Manager becomes the Sponsor of the contractors' project. When contracting service, there are three elements to be considered:

  1. The Service to be contracted out.
  2. Attitudes to Contractors
  3. A process for Contracting

1.     The Service to be contracted out.

It is absolutely vital that the Project Manager invests time becoming clear about what they want the contractor to do. It really does need to be defined carefully.

If this is unclear, then the outcome is almost certainly problems on all sides - lack of delivery, extra costs, and time and effort wasted unnecessarily.


2.     Attitudes to Contractors

Attitudes of contract managers varies. Some focus entirely on a competitive tendering approach, others lean towards a "partnering" approach. As with most things in life, the balance needs to be somewhere between. Be cautious about placing too much emphasis on the tender prices, it can be an expensive idea. Remember, John Ruskin who in 1850 wrote the following wise words:

  • There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper. The people who consider price only are this manís lawful prey.
  • It is unwise to pay too much, but itís Worse to pay too little. When you pay too much, you lose a little money, thatís all. When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing what it was brought to do.
  • The common law of business balance prohibits paying a little and getting a lot, it canít be done. If you deal with the lowest bidder it is well to add something for the risk run, and if you do that you will have enough to pay for something better.

John Ruskin 1850

The Project Manager does need to ensure that selection of a contractor is carried out on an open and equitable basis with due regard for ensuring good use of public funds. However, when the contact is given the Project Manager is dependent on the performance of the contractor and needs to have someone that they feel that they can trust and work well with. At that stage, like it or not, they become partners.

When a project manger is selecting and dealing with contractors, it is them worth trying to understand the contractors motivations and the world they inhabit:


3.     A Process for Contracting

Step 1     Define the Service to be contracted

Step 2     Go to Tender

Step 3     Vendor Selection

Step 4     Post Award of Contract

Step 5     Monitoring Progress