Law 531 Week 3 free essay sample

As you know, eight months ago we entered into a contract with Citizen-Schwarz AG to create custom e-banking software. The agreed contract outlined the details of the arrangement, including on-schedule delivery and quality of the deliverables, strong communication between both parties, procedures for any changes in the system requirements, intellectual property rights, and dispute management procedures. Depending on our performance, we were projecting to gain an additional contract with C-S’s larger e-CRM order. Unfortunately, the original contract was filled with ambiguity from the start that increased the risk factor for both parties. Eight months into the project, our contact at C-S, Mr. Leon Thur, was not pleased with the product manufactured at Span Systems. Mr. Thur asserted that the products from Span Systems were delayed, the finished quality was not to their satisfaction and the product and showed â€Å"major bugs†. Subsequently, Mr. Thur requested that Span Systems transfer all unfinished codes and rescind the contract between Span Systems and C-S. We will write a custom essay sample on Law 531 Week 3 or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page As project manager I was aware of the production and delivery problems; however they were at both ends. The rapid development in user and system studies had changed dramatically from the original contract making it difficult to accommodate the original due date. The contract allowed ordinary requirement changes however the requirement changes were not ordinary resulting in increased production cost and a decrease in quality. Some of the risks associated with Span Systems are †¢C-S’s views and questions regarding performance on deliverables †¢The scope of the project Span Systems has witnessed the miscommunication between our companies that impacted the schedule and the quality of the software being delivered, and the growing requirements and changes since the system study was performed. As a result, the original contract clauses were reviewed, and three were chosen to favor Span in the negotiation to keep the contract with C-S. Breach of Contract Under ‘Internal Escalation Procedure for Disputes’: Prior to filing any formal proceedings with respect to dispute, the party elieving itself aggrieved (the â€Å"Invoking Party†) shall call for progressive management involvement by writing or third party. This is a favorable negotiating point for Span in that C-S has unilaterally called for the binding contract to be rescinded. Breach of Contract Under ‘Communicating and Reporting’: Through the duration of the project there will be regularly scheduled, bi-weekly meetings, between C-S and Span Systems project managers to review the deliverables. This breach was a beneficial negotiation point to Span in that the change in project management at C-S has been the key reason for the delay of deliverables. Meetings to review deliverables has not happened and thus led to slips in schedule requirements and expectations Breach of Contract Under ‘Requirements Change’: C-S will notify Span Systems of any ordinary changes and system requirements originally agreed to. This was also a key negotiating clause in that requirements have grown unexpectedly and unordinary making it difficult to keep up with schedule because C-S was not correctly reporting the changes as drafted in the contract. This clause depended on our metrics. Our Metrics were reviewed prior to negotiation and showed we were planned to have an allowance of scheduled slip days  ±5 days and we were +2 days per deliverable; our metric for defects was planned as Nil, we actually had currently 5 defects per deliverable which was a advantage point for C-S’s argument; and size I (in function points) was planned to be 940 and we actually performed with points 1015. Our Corporate Transactional Attorney, Harold Smith was agreeable with these negotiating points, and we began proceedings with C-S in December. Just before negotiations we received word that C-S might be attempting to negotiate a second contract with Indian Software. We then reviewed our contract and decided that there this was a breach of contract under the Internal Escalation Procedure for Disputes. To be pro-active in negotiating and to save the contract, we decided to appoint a Quality Control Panel. This panel would evaluate claims of deliverable defects and determine remedies, upload daily project updates on Spans extranet for authorized C-S personnel to review, and invite a C-S project manager to serve at Span Systems to serve in a quality control capacity. Mr. Thur did not want to appoint a Quality Control Panel but agreed to allow a C-S Project Manager to serve at Span Systems at the cost of C-S, and agreed that the uploading of project data will be beneficial. These decisions saved our contract in with C-S in January and there is a good chance we will be taking on the larger e-CRM contract. To solidify our future relationship with C-S, it was necessary to make amendments to the already existing contract: †¢The Performance Contract clause has been amended to state, â€Å"Citizen-Swartz AG shall be entitled to receive all work products in progress or completed, as of the date of termination or cancellation, subject to clearance of all payments due to Span Systems at that time. †¢The Change Control Clause has been amended to state, â€Å"Any changes to the user and system requirements originally agreed to will be monitored by the Change Control Board (CCB) comprised of the project manager and lead software manager from C-S and Span Systems. The CCB will decide if the changes will be accepted or rejected. The CCB will also measure the resulting change in the size of the project. Citizen-Swartz AG has agreed to compensate Span Systems for any subsequent new requirements based on incremental increase in size. † †¢The Communication and Reporting clause has been amended to state, â€Å"Project reports will be in the form of meeting minutes and will be uploaded to Span’s extranet and made available to C-S authorized personnel. A C-S project manager will be stationed at Span’s office in California and will participate in meetings and act as direct interface between C-S and Span. The cost of stationing the C-S Project Manager will be paid entirely by C-S. † †¢The Project Structure clause has been amended to state, â€Å"That in order to meet the software delivery schedule originally agreed upon, Span will size up the team by at least ten programmers within ten days of the effective date of the new contract. Span will send the resume of each new programmer to C-S within five days of the new contract and the cost of adding the new programmers will be paid by Span Systems. An interpretation of contracts can become an issue during times of negotiation. Out team should have reviewed the contract as soon as we starting receiving pressure about project deadlines. This would have avoided any escalation between our companies. If this had happened, the most efficient resolution is to renegotiate the contract. This is a key alternative for corporations to avoid battling disagreements in the court system and to avoid costly, project delays. The contract also had a clause for regular bi-weekly meetings which were not being held. If meetings had been held, then the management team here at Span could have resolved problems proactively. Luckily we were able to re-negotiate our contract so we did not lose our invested time, money and hard work. As Project Manager I will carefully review wording while drafting future contracts to avoid ambiguous interpretation that can lead to contract complications.