Preparing to contract out work for two large projects

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Reference no: EM132089482

X-philes Data Management Corporation (XDM) is preparing to contract out work for two large proj- ects: Scully and Mulder. The projects are compa- rable in terms of size, technical requirements, and estimated completion time, but are independent and will be performed by separate project teams. Two managers at XDM, one each assigned to Scully and Mulder, prepare RFPs for the proj- ects and send them to several contractors. The RFP for Scully includes the following: a SOW that specifies system performance and quality require- ments, a maximum price, a completion deadline, and contract conditions; incentives clause stating the contractor will receive a bonus for exceeding minimal quality requirements and finishing the project early, or will be penalized for poor quality and late completion; requirement that the contrac- tor submits detailed monthly status reports show- ing progress on key quality measures. The RFP for Mulder includes a brief SOW, a maximum budget, and the desired completion date. Based on proposals received in response to the RFPs, the managers responsible for Scully and Mulder each select a contractor. Unknown to either manager, they select the same contractor, Yris- ket Systems. The Scully manager selects Yrisket because its bid price is somewhat below the bud- get limit and its reputation in the business is good. The Mulder manager selects Yrisket for similar rea- sons—good price and reputation. In preparing the Mulder proposal, Yrisket managers had to work hard to meet the maximum price specified on the RFP, but they felt that by doing quality work they could make a tidy profit from the incentive offered. The two A few months after the projects have started, some of Yrisket’s employees quit. To meet their commitments to both projects, Yrisket work- ers have to work long hours and weekends. It is apparent, however, that these extra efforts might not be enough, especially because Yrisket has a contract with another customer and must begin work soon.

ANSWERS QUESTIONS USING PROJECT MANAGEMENT CONCEPTS!

1. What is the basis for the problem?

2. Who is at fault?

3. How can the present situation be corrected?

4. Is there any way this situation can be prevented from recurring?

5. How would you handle this situation?

Reference no: EM132089482

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