(#3 in our "Plea for Understanding" Series)
No one spending large amounts of their employer's money on a new IT system will be very happy if the system does what it's supposed to, but only goes live weeks or even months after it's supposed to. Time is money, so along with the delay, there'll be a budget overrun - even if the supplier doesn't raise extra invoices, the daily cost of keeping a project team in place (and maybe "back-filling" their day jobs) can be punitive. There is no such thing as an unlimited budget.
Well-run projects are conducted according to a "project plan". Often, this is in the form of a document lovingly crafted in MS Project with one or more Gannt Charts detailing in almost infinitely-drillable detail every last strand of the project and attaching dates to each.
The project plan can be a vital tool for monitoring progress on the project, and measuring it against budget spend and any important deadlines (e.g. year end, opening of new premises / facilities, scheduled launch of new products / services). This can give invaluable early warning of problems which the party affected might not want broadcasting.
Lovely - but are they any use ? Well, not much if failure to comply with them carries no sanction - in other words, if they aren't binding. So how do they get that vaunted status ? Who can work such a feat ?
Er, you make them part of the deal - part of the contract. This is work for the IT lawyer, and he/she will do this by :
(1) explaining in the contract document what the Project Plan is, and referring to it in relevant clauses / schedules;
(2) making compliance with the Project Plan an obligation of the supplier (and ideally the customer too !); and
(3) identifying the relevant Project Plan by including a copy of it in the contract document or by means of a precise description (title, version, date, authorship etc.).
The IT lawyer should know that it is in the nature of project plans to be "dynamic" i.e. constantly being updated / revised, so the contract needs to reflect this.
This will also help the customer to apply a logical approach to the question of payment profile, and to link the release of chunks of the deal price to the supplier's (timely) achievement of important milestones. It will also inform any discussion of issues like liquidated damages. This helps to manage the customer's risk, and rewards the supplier for success while keeping it 'incentivised' (yuk) to deliver on time - all vital parts of a balanced contract.
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