Variations and Delays – Project Management Processes
By James Clements
I see a lot of discussions in the Project Management community about putting in place structured change processes and project management processes for claiming schedule delay or events of force majeure, but my experience is that in reality it is just not that simple and it takes experience in Project Management to navigate these politically charged waters.
Project success is very much predicated on the relationships within the project and especially the relationship between the project team, primarily the Project Manager and the client, and given that every change in scope, delay or increase in cost is potentially a source of conflict between these two parties, managing this change is so much more than a simple process to be followed.
What a lot of people fail to recognize is the pressure on a Project Manager to bring home the project on time, schedule and to the desired quality, to keep the client happy because of the promise of future projects, so it’s tough for the Project Manager that starts firing off claims for variations and delay, whether they are warranted or not.
I fully agree that a water tight change and conflict resolution process, agreed and documented in the contract is an absolute necessity, but in this article I would like to examine some of the politics that occur in these situations by citing a number of examples I’ve come across in my time as a Project Manager.
A lot of Project Manager’s make the mistake in the early days of a project by thinking that that the client is their friend and shares the same values and motivations. About the only shared value a client might hold as the Project Manager is in regard to schedule, and even then I have worked on projects where the client has actively worked against us to delay the project. This occurred when the end product we were producing did not have the contract to go to that the client had envisioned at the start of the project. Therefore he could not or did not want to fund the final payment and so he and his team did everything they could to slow down progress and in the process delay their payment obligation until a contract was picked up for the product to move to. I think we all need to abide by the saying, be friendly, but not friends, well at least until you have some history with the client, and even then be wary.
The reality is, clients want to look good in the eyes of their superior’s, just as you do, and the best way for them to do this is to get the most they can for the minimum amount of money, just as you are trying to give no more/no less for as little resources as possible. Just as many contractor’s trot out the tired old line, “we’ll bid lean and make our profit on the variations”, the flip side to this of course is the clients always thinking they paid way too much in the contract base price and they will try to get as much scope increase without paying a red cent for it, see the mutual exclusivity of this situation?
So let’s look at some common scenario’s:
Client that refuses to sign off variations
“Well if they won’t approve the variations then we’ll stop work” If only it were that easy, stopping work is tantamount to an act of war in projects and is only a last resort. Yes, every contractor has the right to stop work if they are not being paid, but generally it is not an issue of not being paid, rather the client is disputing claims for variation and if they are good at this then it can just drag on and you really have no grounds to make a claim until finally, you’ve done the work anyway to maintain schedule and you have to escalate the issue and then that can be when your relationship starts to be tested to the limit.
There are many reasons clients delay approval of variations, but let’s look at two I’ve seen a lot. The first is the client that treats the whole process as a game and will want to delay variation approval until the work is complete, then cut a deal on the total variation figure rather than deal with them one by one. These guys are the hardest to deal with especially if they are a repeat customer, they think they have a right to a good deal. The best approach with these guys is to go on the offensive early, insist on regular variations meetings, get you paperwork in order because they thrive on your mistakes and you should never let up, there’s not much else you can do especially if they are seeking clarification on your claims, this can drag it out. If they are just flat out refusing to sign, then sure, roll out the dispute process, but I’ve never seen it that clear cut.
The second common type is where the client representative has no authority. You keep sending him variations but he can’t or won’t make a decision or worse still, he is too scared to present the variations to his boss for fear of looking bad. To avoid this situation you need to tactfully find out the level of authority your opposite number has to approve variations, or better still get it (his level of authority) written into the contract before the contract starts, along with an escalation process in the event agreement can’t be reached. But if this occurs in the project this is one instance where you should not hesitate but to escalate the issue, whether it be to a project board if the project is large enough, via the mechanisms in the contract or back through your PMO so someone more senior than you in your company can have a discussion to the appropriate person in the client organization to either delegate some authority or unblock the problem.
Client that does not recognize delay
Clients rarely recognize delay and it’s amazing how they seem to become master schedulers and try to tell you how to re-prioritize your work or parallel certain activities to work around the issue, simple! My blunt advice with delays is that you need to do exactly what your contract says you should do in the event of a delay. Many Project Manager’s are afraid to use the D word to clients for fear of upsetting them, but let me tell you that the one thing Project Manager’s can’t do and that is to turn back the hands of time. If your contract says you should advise the client when a delay event occurs or is about to occur (some are usually quite specific about the number of days you have to do this) then that’s exactly what you should do, because if you seek an extension of time later in the project and you did not follow the contractual process, you have no grounds to make the claim other than moral (see earlier comment about the client being your friend). It does not have to be an aggressive letter, just whatever the contract requires, and if the client doesn’t acknowledge it, good for you, he is in breach of the contract, so you are up already.
But just to emphasize, always, notify the client as soon as a permissible delay under the terms of the contract, does occur or looks like it could occur, it doesn’t matter if it doesn’t eventuate, but like I said, you can’t go back in time.
Death by a thousand cuts
Sometimes when the client has significant input to the project, such as providing engineering design, approvals, equipment, data, material, services or labor there is no single event that you can put your finger on, but in totality the sum of the all the minor delays here and there, wrong data or material add up to either a tangible delay or an increase in the resources you need to expend to complete the project.
Problem with this scenario is that it sneaks up on you and is usually an issue before you realize it, so you need to be on the lookout for it by setting up monitoring tools as part of your project management plan for client furnished resources.
This is like the previous point and when you get wind of it happening you have to put a stake in the ground and have it recorded in case it becomes an ongoing issue, don’t wait for it to be a huge issue. Too many project managers wait too long to bring these things up and a experienced client will just ask you to show when you advised of this problem and if you can’t you have no recourse.
When you see this happening, you need to have it documented in either client meeting minutes or even send an email or letter to the client representative expressing your concern, again it does not have to be aggressive, you are just pointing out an issue you would like to see addressed, verbal advice means nothing. One of the key points here is to be able to quantify the effect as a metric, if you can’t say X action on the clients part, causes Y reaction on my part, you won’t be able to quantify your claim, so decide early how you will make a claim if it snowballs.
James Clements, MBA, MPD has been managing, directing, winning projects and developing project management processes in diverse industries around the world for the past 20 years. You can contact James via his website here and you can read more from him on his blog.