Francis Hartman

Construction contracts: the cost of mistrust

Abstract Current contractual relationships are mainly based on confrontational situations that reflect the level of trust (or mistrust) in the contract documents. This can be the driver to increase the total cost of a specific project and affect the overall relationship between the contracting parties. This has been tested in the construction industry in Canada, and appears to be generalizable across North America. Based on two independent surveys (including the one presented in this paper) of Owners, Consultants and Contractors across Canada, the assessed premium associated with the five most commonly used exculpatory clauses in construction is between 8 and 20% in a sellers market. It should be obvious that trust and contracting methods are related and that this relationship is of vital importance to effective project management and contract administration. To date, little work has been done to explore the advantages of this relationship. This paper presents some of the results of a survey conducted across the Canadian construction industry that identifies some opportunities for better risk allocation mechanism and contracting strategies that are based on a trust relationship between the contracting parties. These opportunities are based on a trust relationship that can be the root cause for a significant saving in the annual bill for construction.

Project Management in the Information Systems and Information Technologies Industries

For many enterprises, sustainable success is closely linked to information systems (IS) and information technologies (IT). Despite significant efforts to improve software project success, many still fail. Current literature indicates that most of the software project problems are related to management, organizational, human, and cultural issues—not technical problems. This paper presents results of a survey of 36 software owners/sponsors, contractors/suppliers, and consultants on 12 projects. The empirical results address answers to questions related to success, performance metrics, and project business drivers. A lack of alignment on these critical issues emerge consistently by phase as well as across the entire project. The results of this study also are compared with others that span seven additional industry sectors. As a result, the authors have developed an approach that links project critical success factors (CSFs) to corporate strategy, and project metrics to the CSFs. An important finding of this study is the critical need to identify and manage realistic expectations of the stakeholders to achieve perceived project success.

Pervasiveness of Projects in Business

The purpose of this book is to describe and analyze the roles that projects play in business. What are the mechanisms involved? Implicitly our suggestion is that projects are important for a variety of reasons, one of them being that there is an abundance of them. In fact, there also seems to be wide agreement in the business world and among researchers that projects are much more prevalent now than they used to be (Ekstedt et al. 1999, Lundin and Midler 1998). This agreement appears to have been around for quite some time which should mean that there is in fact a positive trend. The agreement is not based on sufficiently hard facts or impeccable data, though. One reason for this is of course that there are very little, if any hard data available. Economic activities are registered almost exclusively with companies as the important units, seldom or never with projects. Another reason is that there is not one agreed upon definition of projects, but there are several. And most definition efforts have flaws in one way or the other. Projects come in such a variety of shapes and under such a variety of circumstances that efforts to find an overall and strong definition appear if not futile, at least very difficult. However, there have been some seemingly promising attempts to instigate order in this diversity of project definitions by trying to find characteristic project patterns aligning with various sets of parameters (like business, tools, size, complexity etc.). These efforts to characterize projects are mainly made in order to identify how to manage them more effectively. At that, there is a way to go before results of these attempts are both successful and useful, in particular for the statistical purposes we have in mind here.

Innovation in Project Management Using Industry as the Laboratory

This chapter describes how industry has been used to stimulate innovation in project management research at The University of Calgary in Canada. The principal objective of the two-year-old research programme, sponsored by industry and government granting agencies, was to develop new and innovative methods with which to manage projects. Industry practitioners and companies form an integral part of the research programme, contributing in the form of sponsorship (direct and indirect), the production of ideas, forming project-specific advisory teams and, most importantly, providing projects for study.

Business in the Future and the Nature of Projects — Research Issues

A clear message in the various chapters of this book has been the need to understand the essential nature of the organizations that sponsor projects and the temporary teams that deliver them. Projects are no longer a prerogative of the world of technology. The use of project terms, habits and practices has extended well beyond technology-based ones. Project management has also grown from its beginnings in scheduling techniques as seen with PERT on the Polaris Project in the 1950’s, into a significantly more sophisticated skill set. This set of skills encompasses not just project management tools but also deals with the business and social context of projects. The relationship between organizations that sponsor projects and the teams that deliver them is of significant importance to the efficacy of the projects themselves. We can see these relationships continue to evolve. The differences between the two groups are diminishing as the organization adopts project tools, project teams adopt more process thinking and both become more socially aware. The growth in social awareness generally and triumph of the individual in particular was predicted by Naisbitt and Aburdene (1990). In projects we see this emerge as a part of evolving project management practices. At the outset we saw project management as essentially a tool-based discipline, with a heavy focus on scheduling and other techniques. The next stage in the evolution of project management was growing awareness of the need to address process issues, such as team effectiveness and how to move from a plan to action by the team members.

Leadership Fears and Frustrations in Project Management

Leadership literature has repeatedly identified the visionary, team building, communication and conflict management skills required in project management. Although many authors focused on noble leadership traits and characteristics very little research has been evident on the fears and frustrations project managers experience.