How Much Do You Know About Your Project’s Contracts

Whether your project is small and routine or it’s the most complex effort your company has undertaken, you’re sure to have at least a few contracts in place to help get things from the planning stage through to a successful completion. These could include commitments for craft labor, purchasing agreements to secure supplies and services, contracts with a temporary staffing agency, or consulting arrangements for niche expertise.

Though most contracts have a limited scope, such as for the installation of a particular type of equipment, the effects of each agreement may ripple across several different functional areas. That’s one reason that involving the right stakeholders at the outset is vital if you want to maintain good project visibility. So before you start signing contracts for your next initiative, ask these key questions to be sure you know the details—including the obligations, opportunities, possible risks, and limitations—of each one.

What’s included? Some service contracts cover off-hours work while others do not. Purchase agreements might include equipment delivery and setup, but that isn’t always the case. Those terms will influence how your team schedules work and allocates expenditures. You may need to coordinate (and pay for) support from multiple vendors to complete key tasks. Conversely, if a service or product is included in the contract, then you want that information so you don’t inadvertently buy something you don’t need.

What’s required of you? Your vendor and supplier contracts may obligate your project team to execute certain activities, provide requested data, or finalize project specifications within a set time frame. If a contract for a new technology platform requires that you provide details about your existing network architecture before implementation begins, then you need to manage and track that commitment so it’s completed on time.

How are prices calculated? A contract may lay out the cost structure for every available service or add-on item. Others might spell out fixed pricing for only a small subset of services, leaving any extras to be negotiated individually. Though you may not need to go beyond the limited range of services or materials specified in the contract, you should be aware of the potential costs—or lack of firm cost data—for items you might choose to pursue later in the project’s lifecycle.

Who’s doing the work? If a vendor intends to sub out a portion of their work to another company, then it should be clearly noted in the contract. This information is important because you may opt to decline the contract if the arrangement doesn’t comply with regulatory or legal mandates that govern the project’s execution. Other internal teams could also be interested in this information if they need to issue door access cards, for example, or system login credentials the vendor and its subs will use during their contracted term.

How is data protected? Depending on the type of vendor and the work they’re doing as part of your project, they may have access to sensitive information in either digital or physical form—corporate financial documents, personnel records, customer or patient data, etc. It’s crucial that you understand which datasets each vendor will have access to, which of their employees (and possibly sub-contractors) will hold login credentials to core systems, what they are and are not allowed to do with that information, and how they’ll handle any data still in their possession at the end of their contract. It may also be prudent to outline what actions the vendor is obligated to take in the event of a data breach, unauthorized disclosure, or data loss, and include those terms in the agreement.

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