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PM Proposals Consulting CC |
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Getting it right before it goes wrong |
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B. 10 Common Causes of Project Failure
1. Inadequately trained and/or inexperienced project managers. 2. Failure to set and manage expectations. 3. Poor leadership at any and all levels. 4. Failure to adequately identify, document and track requirements. 5. Poor plans and planning processes. 6. Poor resource requirement estimation. 7. Cultural and ethical misalignment. 8. Misalignment between the project team and the business or other organization it serves. 9. Inadequate or misused methods. 10. Inadequate communication, progress tracking and reporting.
C. Senior Management Confidence in Bid
With the current trend of project phases being overlapped and shortened, contractors are expected to take on more risk by being given less information and shorter time periods to prepare bids / proposals / tenders. Where project execution is sub-contracted to third parties, end users of the project product are demanding quicker turnaround times for project delivery, which means that all parties involved in the project, from design to final handover, are expected to take on additional risk. Contracting parties, with limited in-house resources, have a choice of how to manage the resultant associated increased risk:
1. Request a cost-reimbursable type contract. Generally unacceptable to end users / clients since the client has no control over final cost.
2. Estimate a probable cost in the traditional manner, add a mark-up for overhead and profit and then add a big contingency amount as a safety factor. This strategy can either cost the contractor the contract due to pricing being uncompetitive, sometimes turn out a profitable project, cost the contractor money to do the work for the client or even bankrupt the contracting company.
3. Where allowed in larger contracts, pass on major risk to sub-contractors by imposing onerous contracting conditions. This transference strategy does not eliminate risk and in some cases can bankrupt the sub-contractor, leaving the main contractor with a partially completed portion of the work and greater financial / legal problems than he had before engaging the sub-contractor.
4. Evaluate the enquiries / requests for quotation / requests for proposal from prospective clients. Short list acceptable invitations based on available resources and project / contracting risks. Gracefully decline to bid on work not selected by the short-listing process. For the balance, prepare and submit complete, well researched bids which can be submitted with confidence. Award of a contract should be a celebratory occasion for a contractor and not, as is often the case, a time to be concerned about the possibility of incurring losses on the contract.
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