After reading what follows, I’m sure you’ll agree . It is crucial for project managers to have contractual knowledge. Otherwise, how else could they strengthen their big-picture view of their projects? And similarly, how do we contract and commercial professionals tackle this mission? If we’re not, we’re building walls, not bridges!
Three questions I often hear when trying to introduce contractual and commercial management (CCM) knowledge to project managers:
- Why is CCM knowledge essential for project managers?
- Don’t companies have contract and commercial managers on their teams to do that work?
- Do project managers really have the time to learn this – do they need more workload to add to their pile of tasks?
Their reasoning is obvious, companies pay contract and commercial managers to do this work and advise project managers. End of story. In these situations, I smile and think: ‘It is always fascinating to hear complaints about organizing the work from those who are supposed to organize the work!'
However, for someone who spent (and is still spending) his life in construction and engineering projects, I was neither surprised nor disappointed with the questions or pushbacks.
The amount of professional and personal pressure in a project manager's life is enormous. For those who have never worked in the construction industry, I can easily say that it is a battlefield where project and construction managers and leaders are responsible for workers' safety and well-being while managing budgets of millions (if not billions) of dollars as well as delivering ahead of schedule with specified quality. The attending cost could involve public taxpayers’ money or private ambitious stakeholders' investment,
Am I giving excuses now? No. I am describing the day-to-day life of project managers of construction projects specifically. As someone who came from that field and evolved into contracts and commercial management, I find it crucial to help project managers get the necessary contractual knowledge to strengthen their big-picture view of their projects.
So how do we, the contract and commercial professionals, tackle this mission? And why should we be interested?
From project management basics, we know that every construction project has a cycle that starts with initiation, continues through planning, execution, monitoring and control, and ends with closing. In the initiation stage, the concept is born, the research and communications start to draw a high-level image of the project, and the investors start meeting with their financial advisors to see the feasibility and forecast benefits of the project.
Does any of that remind you of how contracts evolve?
Moving into the planning phase, project teams are starting to take shape, yet they are dynamic and generic. A project manager might be assigned at this phase, and more stakeholders are involved now, including but not limited to architects, engineers, planners, bankers, and subject matter experts, depending on the type of the project. It feels the same as starting the preambles and definitions in any contract where the contract is starting to take shape.
That’s where it gets complicated…
The action within the project starts with the execution stage, where project managers roll up their sleeves and begin implementing the plan on the ground. In this phase, gaps in the design and the scope start to appear, and now project managers must be heavily involved in resolving issues that can slow down the progress or cost the project owners more money. I use this phase to compare to laying down terms and conditions of any contract where contract professionals, lawyers, and technical experts will sit around the table and share all their knowledge and experience to try to cover the scope and avoid any potential gaps during the contract execution.
Have I just used the word execution twice? I did it for a reason…
Along with project execution, another process will occur in the background yet be at the forefront of the project's progress. This phase is known as ‘Monitoring & Control,’ where (depending on the project's size) a team will be doing the ‘Radar’ role. This team will track budgets, costs, schedules, and, more importantly, changes. The project control team will be the right hand of the project manager and will act (when done professionally) as the project ‘protector’ and advisor to the project manager.
Needless to say, there are many layers to this process. However, this short article highlights the match between project and contract management. Now, I will ask the reader to go back and read the previous paragraph
(Monitoring & Control) from the beginning but with a contract manager's eye. Did you notice anything? Is this not what we contract professionals call "contract administration"?
Finally, after reaching the top of the mountain and achieving the project deliverables, it is time for closure. Usually, project managers do not like this process, because it includes much housekeeping -- working on fine details of commissioning the project's output (a building, a stadium, an airport, etc.), and finalizing project numbers and subcontractors' final accounts.
Again, this is no different than closing contracts for contract professionals. All scope items shall be verified with the project team, all warranties and liabilities shall be clearly identified and initiated, and all final handover documents shall be properly archived and shared with the project owner or sponsor.
In conclusion, this subject cannot be covered in one short article. Still, it is vital to start the conversation and work on the best way to approach project managers to introduce the beauty of the contract and commercial management world through simplified education and streamlined processes, to prove the benefits of this valuable knowledge to project managers and stakeholders alike.
- PMBOK® Guide – Seventh Edition- Project Management Institute- July 2021
ABOUT THE AUTHOR
Youssef, a passionate project and contracts manager, started his career as a field engineer on construction sites, moving towards construction and project management for multi-million dollar projects in various types, from oil & gas, buildings, airports, power generation, and infrastructure, in many countries around the world and for both contractors and consultants.
Member of Project Management Institute PMI since 2008 and a member of World Commerce and Contracting (formerly known as IACCM), Youssef had his PMP (Project Management Professional) designation in 2014, he is a Professional Engineer (P.Eng.) in the Province of Manitoba (Canada), LEED Green Associate, and certified contract management professional (CCMP) since 2019. He has bachelor’s degree in civil engineering, post graduate degree in structural engineering, Masters in Project Management from the University of California Los Angeles, Certificat en Perfectionnement du français from Université de Saint Boniface, and an associate degree in Contract Management from the University of Southampton. Youssef was elected as Council member at World Commerce and Contracting representing Western Canada for the term 2022-2024.
Youssef's driving motive is a quote by Dr. Martin Luther King:
"If you can't fly then run, if you can't run then walk, if you can't walk then crawl, but whatever you do you have to keep moving forward."
Jacobs is challenging today to reinvent tomorrow by solving the world's most critical problems for thriving cities, resilient environments, mission-critical outcomes, operational advancement, scientific discovery and cutting-edge manufacturing, turning abstract ideas into realities that transform the world for good. With approximately $15 billion in annual revenue and a talent force of approximately 60,000, Jacobs provides a full spectrum of professional services including consulting, technical, scientific and project delivery for the government and private sector.