Trust, but Verify – Dealing with Vendors and Subcontractors

“Trust, but verify” – a phrase made popular by President Ronald Reagan in describing his strategy for dealing with the Soviet Union during the cold war, should also advise project managers in their relationships with vendors and subcontractors.

As a project manager, you may not have been involved in the decision to use a vendor or subcontractor on your project. The decision to contract may be made for cost, technical, or political reasons – often above your pay grade. I hope that you had input into the requirements and evaluation of contenders and you will certainly be expected to manage them and assure their contribution to the project once it is underway.

How to Evaluate Vendors and Contractors
This is not a one-size fits all list of suggestions — circumstances vary. Best case, you know the contractor already. Alternatively, you have the opportunity to travel to the contractor’s office and talk with the potential contributors personally. Least desirable option from your perspective — you have to work with the organization assigned by senior management.

Assuming a middle of the road situation where you:

  • Help generate the vendor or subcontract requirements and statement of work
  • Evaluate technical portions of proposals from potential vendors
  • Visit and interview the finalists

Here are some suggestions:

  • Talk to potential contributors, not just business development or marketing people
  • Do your homework about the organization through informal channels with peers who may have worked with them
  • Ask questions about the organization’s recruitment and training (because they may need to hire new people for your contract)
  • Ask for and check references – especially if your organization’s client has any history with the vendor
  • Tell them as much as you can about your project objectives, constraints, and expectations of them. Listen to their response and questions and compare them with the attitude, understanding and interest you would like to see.
  • Make your recommendations based on past performance and demonstrated capability.

If you want some suggestions on assessing capabilities – particularly if your organization is e-sourcing –check out the best practices capability suggestions from ITSqc.  (ITSqc, LLC is a spin-off from Carnegie Mellon University that includes a multidisciplinary group of researchers and practitioners. They have developed a service provider’s evaluation process that carries the pedigree of the Carnegie-Mellon software institute.)

How to Manage Vendors and Contractors
For guidance on process, I encourage you to review Chapter 12 of the PMBOK on Project Procurement Management. The PMBOK walks you through several process areas including planning, conducting, administering, and closing out procurements. Detailed discussion on types of contracts, change processes, required documentation, and risk management may not be entertaining reading, but the suggestions are worth noting. 

Less formal than PMBOK, here are additional suggestions on working effectively with vendors and contractors:

  1. Communicate, communicate, communicate. I talked about this in greater detail Managing a Remote Team
  2. Manage risks, don’t react to problems — Is Project Management a Risky Business?
  3. Read the contract
  4. Be specific and use many examples, especially when talking about concepts of operations and user interface look-and-feel
  5. Spend more time in planning and monitoring than you would for project employees

Please share your experience and advice with fellow project managers – we are all in this together!

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