2. Common Contract Situations
Participation in a tender
Proposal submission according to
customer’s RFP (request for proposal)
Receipt of an order from a company’
customer
Internal request from another department
in the organization
3. Contract Review Stages
The contract review consist of
Proposal draft review
Reviews the proposal prior to submission to the potential customer
This includes customer’s requirement documents, cost and resource estimates,
existing contracts or contract drafts of the supplier with partners and subcontractors
Contract draft review
Reviews the contract draft prior to signing
Review on the basis of the proposal and the understanding (including changes)
reached during the contract negotiation sessions.
4. Proposal Draft Review - Objectives
Make sure that the following activities have been satisfactorily carried out:
1. Customer requirements clarified and documented
2. Alternative approaches for carrying out the project examined
3. Formal aspects of the relationship between the customer and the
software firm specified
4. Development risks identified
5. Project resources and timetable adequately estimated
6. The firm’s capacity with respect to the project examined
7. The customer’s capacity to fulfill his commitments examined
8. Partner and subcontractor’s participation conditions defined
9. Protection of proprietary rights defined
5. Contract Draft Review - Objectives
Make sure that the following activities have been
satisfactorily carried out:
No unclarified issues remain in the contract draft
All understandings reached subsequent to the proposal
are correctly documented
No “new” changes, additions, or omissions have
entered the contract draft
6. Implementing Contract Reviews
Factors effecting the extend
Project magnitude
Project technical complexity
Degree of staff acquaintance with and experience in the project area
Project organizational complexity
Who performs the review?
The leader or another member of the proposal team
The members of the proposal team
An outside professional or company staff member who is not member of the proposal team
A team of outside experts (ascending order, according to the complexity of the project)
7. Contract Reviews for Major Proposals
We have a major proposal when we have
a very high project magnitude,
a very high technical complexity of the project,
a new professional area for the company, or
a very high organizational complexity.
Resulting problems:
Time pressure: only a few days for each stage
Substantial professional work
Team members are often very busy
8. Contract Reviews for Major Proposals
Recommendations:
Schedule for contract review
Teamwork to share workload
Appoint a contract review team leader (clear responsibilities)
Review team leader responsibilities:
Recruiting
Distributed review tasks
Coordinate review team
Coordinate with proposal team
Follow-up activities, especially conformance with the schedule
Report finding to the proposal team
9. What about Internal Projects?
Types of internal projects:
1. Administrative or operative software to be
applied internally
2. Software packages originally intended to be
sold to the public as “off-the-shelf” packages
3. Firmware to be embedded in the company’s
products
10. What about Internal Projects?
Contract vs. “loose relationship“ problems:
1. Inadequate definition of project
requirements
2. Poor estimate of the required resources
3. Poor timetable
4. Inadequate awareness of development risks