Project Initiation, Part 6 – Final Initiating Activities

After the proposals or bids are received, the customer (internal or external) must evaluate and formally decide to begin the project.  The result is a contract and/or notice to proceed.

Final Initiating Activities

These activities are most relevant when hiring an external contractor.  However, since detailed project planning has not yet taken place, some of these activities are useful even before granting final authorization for a project that will be performed with in-house labor.

1.  Analysis of bids and/or proposals by the customer (obtain any necessary clarifications).

If the request for proposal or bid package was complete, and assuming it specified a standard format be used by the offerors, and assuming you have a set of selection criteria to apply, you should be able to compare the offers in a structured fashion.  In some cases all of the potential providers are qualified, so you accept the lowest price.  In many cases, the lowest price will ultimately not produce a satisfactory result, so be careful to check references and when applicable, technical approach.

2.  Interviews and presentations.

When contracting for a technical project that is either complex, costly, or both, invite two or three of the best offerors to give presentations, or at least attend interviews to discuss their approach, explain why they believe it to be the best approach, and why their approach and pricing will give you the best value for this project.

3.  Negotiations.

At this point, you may decide to negotiate pricing with one or more of the offerors.  Having heard everyone’s technical approach, you might have a preliminary choice, but want that provider to adjust technical approach to include some of the other ideas you’ve been hearing.

4.  Modifications to scope, statement of work, costing, schedule based on any approved options and negotiations.

Adjust these items if so indicated, receive concurrence from your intended provider.

5.  Signing contracts and obtaining certificates of insurance.

Identify who has authority, for both the customer and the provider, to sign contracts and change orders.  Obtain certificates of insurance for commercial general liability, automobile, workers compensation, and in many cases some combination of errors/omissions and products/completed operations.  Consider endorsements for additional insureds and waivers of subrogation.  The contract should specify that the provider cannot use lower tier subcontractors without your prior written consent.  For large construction projects, bonding should be provided.

6.  De-briefing the competitors.

As the customer, this is a nice courtesy to extend.  Providers who were close to being selected can benefit from knowing where they need to improve, and providers who were not close can benefit from knowing they are wasting their time.  It seems like this helps businesses become more efficient, which benefits everyone.  If you were a competitor, you want to know why you were or were not selected.  Ask for a debrief if one is not offered.

7.  Notifying stakeholders.

Not only is this a courtesy to your employees and other stakeholders, but since the project may affect their work lives and schedules, it allows them to get prepared.

8.  Notice to proceed

This could occur several weeks after the contract is signed if insurances, bonding, indemnifications, subcontracts, background checks, drug tests, specialized training, etc. must be completed before on-site work begins.

Next Article in This Series:  Begin Detailed Project Planning.

About the Author

An engineer by training, Randy Klein has 30 years of consulting experience, 20 of which have included project management duties.  His project management curriculum has been used by a variety of university continuing education departments and private resellers.  He invites your questions and comments related to project management, quality assurance, and organizational improvement.  Contact Randy at (801) 451-7872 or projects@streamlineut.com.

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