XYZ Pharmaceutical Company
Scenario Summary: XYZ Pharmaceutical Company
In this exercise, you play the role of Shawna, a project manager for XYZ Pharmaceutical Company. Currently, you are managing a large IT project in the healthcare industry for XYZ. Your project is to refurbish an existing office building, install the IT infrastructure, and outfit the area for use as a new telephone answering hub for your company. You took over this project a week ago from John, the previous project manager. John had overseen the project since its inception.
This project is in the execution phase, with the refurbishing and installation of the infrastructure currently being done in concert with each other. All of the new office equipment is on order and is scheduled for delivery on the day after the refurbishment and infrastructure work are scheduled for completion. The overall work progress is about three quarters finished. Senior management is pleased with the progress of the project so far.
There are four vendors working with you on the project. Ken’s Construction Company is handling all the refurbishment. This work includes all structural work, drywall, and electrical work in the building. Jaime’s Interior Design is doing the carpeting, painting, and cubicle work. Carolyn’s IT Services is installing all IT components, including servers, IT cabling, and a wireless network. Mike’s Office Equipment is providing all desks, computers, and phones. All contracts associated with this project are fixed-price contracts.
Since taking over for John, you have had a number of contractual issues arise associated with this project. You have delayed making any decisions about these issues, hoping they would work themselves out. Today, a third contractual issue was brought to your attention.
Realizing you can no longer postpone action on these issues, you call a meeting of your project team. You project team is made up of three individuals. Iris is the future manager of the telephone hub. Tony is the IT lead on the project. Phil is the facility specialist assigned to your team.
You describe each of the three issues to the team and ask for input.
Ken’s Construction Company is making a claim that it is not responsible for inspections required by the local township. Ken has produced a memo signed by John during negotiations that states that XYZ is responsible for all permits and inspections. However, a quick review of the contract shows that Ken is responsible for all inspections. Failure to resolve this issue will likely delay the project at least 1 week, because Ken is making no effort toward arranging for the required inspections.
Jaime’s Interior Design has brought to you another issue. In the contract, under the section labeled Special Conditions, it states that carpeting must meet a specific wear rating. In the same contract, in the General Conditions section, the contract prohibits the use of any nongeneric materials within the work of the contract. This would include carpets with special wear rating, because these would be nongeneric materials. Jaime has already purchased and begun the installation of the generic carpet that does not meet the wear rating.
Mike’s Office Equipment has informed you of a minor typographic error in the contract with you to provide office equipment for this project. In the contract, it states Mike shall be paid as follows:
$425,000 (Four hundred and twenty-five thousand dollars)
Mike apologizes for any inconvenience this may have caused and is awaiting the payment of $425,000. The company further states $425,000 would have not likely even begun to cover the shipping costs. Mike informs you that it will ship the office equipment when the remainder of its fee is received. After receiving this information from Mike, you priced out the cost of the office equipment from other vendors and the average price was $50,000.
As the project manager, the project team is looking to you for direction on each of these issues. Review the comments of the key players, consult the grading rubric below and then answer the following questions.
- Is Ken or is XYZ responsible for the inspections? What is a reasonable course of action given that the project may have to be delayed a week or more?
- What carpet should be installed? Should work be stopped to evaluate this issue? What do you do to resolve this?
- How much is owed to Mike? What actions would you take as the project manager?