Contract Creation and Management Simulation Analysis

Contract Creation and Management Simulation Analysis

The simulation presents a scenario that demonstrates the necessity of ensuring clarity in the creation of a contract. The scenario highlights a software development company called Span Systems (Span) and a large German bank called Citizen-Schwarz AG (C-S). Span has entered into a contract with its client, C-S to lead an important one-year banking software project worth $6 million. Span’s successful completion of this project will increase the probability of additional projects with C-S in the future. Four months from the projected completion date, C-S becomes frustrated with Span because of their quality of work, and failure to meet scheduled deadlines. As a result, C-S is requesting any unfinished code and to rescind the contract (University of Phoenix, 2002).

Span claims that these issues are the result of unexpected changes that are not specified in the original contract. Since finalizing the contract, Span’s challenge is an increase of users and system requirements, change requests are taking more time than anticipated, and C-S’ project management structure faces changes (University of Phoenix, 2002). This paper will provide an analysis of the issues presented in the simulation of Span Systems (Span) and Citizen-Schwarz AG (C-S) and how Span partners with C-S to avoid litigation and resolve issues by taking proactive measures to ensure project completion.

C-S’ demand to rescind the contract raises some concern with Span around breach of contract. Span can either choose to defend itself by identifying breaches in clauses of the contract or they can negotiate changes to avoid litigation. The problem stems from unexpected changes to the project not reflected in the original contract. Although C-S claims that Span’s quality of work is low, and there is a failure to meet deadlines, they fail to realize that Span is doing more than originally agreed, but is challenged with an increase in users and system requirements. If both companies keep each other informed, they can mitigate issues in delaying the project. According to University of Phoenix Claims avoidance techniques (2001), delays in schedules for projects should be updated immediately to notify the owner, giving them an opportunity to respond and mitigate delays.

Although both companies have different perspectives, Span can avoid litigation with C-S by suggesting proactive measures to help C-S achieve their business goals. Appointing a panel of managers from both companies to monitor change requests and changes in scope will ensure immediate consideration of the need to redefine requirements. Scheduling regular status meetings, providing recorded minutes via the extranet, and assigning a C-S project manager onsite at Span will ensure both companies receive updates regularly and can track progress throughout the project. Immediately adding additional programmers