As Project Managers, we all know the Project Charter or Project Brief. This document marks the start of a project by documenting the goal of the project, the required result and under which conditions the project will be delivered. The Project Owner is responsible for the creation of this document, where the Project Manager will provide input if possible.

And then we start. As a Project Manager, we take on the assignment based on the available documentation and shared information during the intake. We have a basic understanding of what needs to be done. We have the end goal in mind. And we start to do what a Project Manager needs to do first. The creation of a Project Contract (Project Initiation Document — PID, I will use Project Contract for this Blog)!

What is a Project Contract? A Project Contract is a contract between the project team and the project owner, stating the project scope and exact result, an activity plan and a control plan. What is needed to create this Project Contract? Time, cooperation, and interest from all parties involved.

A Project Contract is a way for the Project Manager to negotiate what the exact outcome of the project should be, under which conditions the project will be performed, what the time frame will be, the scope and the decision power of the Project Manager. In this way, the Project Manager will add her experience to the project to clarify what is expected and by when.

To create a Project Contract, the team will perform a couple of activities. First, they will do a risk analysis based on the available information and interviews with stakeholders. Second, it will create a plan to stay in control regarding time, money, quality, information, organisation, and communication. Boundaries will be set in which the Project Manager can manoeuvre. Next a plan will be created to support the different phases of the project and the activities to be taken.

The Project Contract can be adjusted as the project moves across the different phases. Major changes will have an impact on the timing, the deliverables, these need to be reflected in an updated Project Contract. We as The Independables truly believe in the use of Project Contracts. It is a mutual created commitment which will lead to better results. And better results will be a big win for every stakeholder involved.

For a project to be successful, it is important to spend time to create and agree on the Project Contract. Some benefits:
– Better understanding of the project goals, risks, activities & planning by the project team
– An agreed set of control mechanisms
– Agreed boundaries in which the Project Manager can to work
– Increased commitment by the project team
– Higher quality output
– It formally authorises the project to exist
– It formally recognises the role of the Project Manager and grant authority
Creating and agreeing on a Project Contract takes time. But the effort put in upfront of the project will pay off.