New Contract Model for Project Management

New Contract Model for Project Management

By Jacob Kashiwagi, Dean Kashiwagi, Kenneth Sullivan

May 2010

A new contract model has been developed which changes a project manager’s (PM) responsibilities from writing and enforcing a contract, to transferring the responsibility of writing and administering the contract to the vendor. The new environment changes the PM’s role from management, direction, and control, to quality assurance.
Quality assurance is ensuring the vendor has a quality control and risk management plan. The new model is based on the assumption that the client cannot control the vendor through the contract. The control mechanism is deleted, and the vendor creates a contract document that minimizes risk. The contractual document, which must be approved by the client’s PM and legal, includes a risk managing mechanism called the risk management plan (RMP) and a weekly risk report (WRR.) The new contractual mechanism is the expert contractor’s mechanism to document and minimize risk and transactions.

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