Despite all the effort that goes into negotiations, and even when proper governance and contract management have been hard-wired into the relationship, complex projects still sometimes go wrong.

It’s a cliché (but like all clichés, generally true) that troubled projects needn’t become failed projects. Usually, a lot of pain can be avoided by decisively addressing problems early on. This of course requires an accurate diagnosis of the cause of difficulties and fortunately (or unfortunately) there are a number of notorious stress points which recur time and time again.

1. 1.Poorly defined requirements
   

The single most important component of any complex project is the specification of work. If this isn’t clear there will inevitably be problems. Whilst it’s unrealistic to expect a statement of work to be definitive, vague service requirements are a cardinal sin and lead always to the same result: mismatched expectations and confusion about customer and supplier responsibilities. Similarly, aspirational requirements which look attractive during the sales pitch rapidly loose their lustre during delivery.

In outsourcing contracts, general statements about the supplier doing what was being done before it took over the services are no better - the customer’s baseline data is usually incomplete and supplier due diligence will never reveal everything.

Service requirements should be expressed clearly and in as much factual detail as possible from the start. Some further definition at a later stage will usually be inevitable but this is no justification for a vague wish-list at the outset.

2. 2.Shortened timeframe or discounted price agreed pre-contract
   

A customer may push back aggressively on timeframe and price during negotiations. This is to be expected: business is business. The customer will always want the best price and procurement teams are usually under pressure to deliver lower costs and better performance.

At the same time the supplier’s sales team, incentivised to win work, will have a natural tendency to commit to challenging deliverables in order to secure the deal.

But there are good reasons why both parties should avoid this scenario. A brutally compressed timetable or discounted price is good for neither. The supplier risks making little or no profit and failing to meet its contractual milestones. For the customer, the initial attraction of reduced price and compressed deadlines may quickly lead to internal resource-shortages, and a supplier nursing grievances about the terms of the deal. And a supplier which goes into a project knowing it must grow the account or find ways of revising the scope in order to make a return, will behave in a certain way. Project dynamics can quickly become fraught.

Ultimately, there is much truth in the aphorism: fast, cheap, good - pick any two.

3. 3.Failure to comply with the change control process
   

Adhering to the change control process is vital for both parties.

Without proper change management, evolving service requirements will lead to informal project-creep and this is always problematic. The supplier risks not getting paid for work which is not properly authorised. The customer in turn jeopardises its contractual remedies for failed or late deliverables because it may, by endorsing an informal variation in scope, affirm what would otherwise be a clear breach of contract. This way lies a legal and evidential quagmire.

These risks can be alleviated by following certain basic protocols.

The change process is there for a reason. Use it. Change notices should be explicit and detailed: about cost, timeframe and specification. Ideally, the customer should allocate an internal budget at the outset for change management. This helps to avoid every small change becoming a corporate trauma.

For the supplier, it may be tempting to charge for every variation in project scope, however trivial. The pressure to do so increases wherever margins are tight and, in any case, most suppliers incentivise their account teams to sell additional business. It is worth reflecting that long-term success is underpinned by long-term performance and delivering long-term value. Short-term gains are usually transient and risk sullying relationships for good.

4. 4.Starting work before the contract is signed
   

This is common practice and often for sound commercial reasons. It does nevertheless carry risks. Primarily it means there’s usually no contractual baseline against which the supplier’s performance can be measured during the pre-contract phase of the project. The customer’s service requirements are also likely to be evolving and not properly defined or fixed. The potential for the project to get off on the wrong foot may be magnified as a result.

The easy answer is for the parties not to start work before the contract is signed. Easy to say, sometimes rather harder to observe in practice. If operational imperatives do make pre-contract work unavoidable, every effort should be made to move to a sounder contractual footing as soon as possible. In the meantime, the attendant risks can most effectively be mitigated by strong project governance, collaborative engagement and candid communication about preliminary scope.

5. 5.Lack of cooperation
   

In outsourcing projects a common supplier complaint is that the customer assigns too few people to interface with the architecture and development teams. The customer may in turn believe that the supplier’s personnel don’t understand its business. The list of potential grudges is endless.

Ultimately both parties owe each other a duty of reasonable cooperation. This is often set out explicitly in the contract but is in any case a long established duty at law (Mackay v Dick (1881)).

To attempt to identify the legal parameters of this duty rather misses the practical point. Pragmatic and constructive cooperation is good for the parties and good for the project.

In any complex relationship where success rests on multiple interdependencies it must be a priority for both parties to cooperate reasonably and to persuade the other to do likewise. If one side obstructs and procrastinates the sensible course is to make contemporaneous records and raise individual examples at project board level. Candid dialogue in this vein may be awkward at the time but is likely to diffuse longer-term and more profound tensions.