Demand Intercity Professionals

Case Study #5: Demand Intercity Professionals

Presented by: Sameer Wagherkar

I Major Facts:

• DIP is a major telecommunications company, providing services across several major cities.

• DIP has received large number of customer complaints regarding improper charges on phone bills.

• DIP COO has authorized a project to review existing billing system and develop a new system with better efficiency.

• DIP COO wants to bring in an external management consultant to work on this project.

• DIP Project Manager prepares SOW for RFP used to solicit bids for this project. RFP issued to 3 bidders.

• DIP PM and Procurement manager chose BAD based on individual interviews with key personnel from all bidders.

• Contract agreed on is a CPFF with reimbursable costs tied to hourly billing rates (rates based on classification of personnel).

• Post 6 weeks, most of work is being performed by less experienced personnel who charge lower rate. Personnel initially interviewed (higher costs/hour) have spent less time on project.

• DIP PM believes project is behind schedule due to the use of less experienced personnel.

• DIP PM and Procurement Manager meet to determine mitigation plans to bring project back on schedule.

II Major Problems:

• Performance requirements seem to have been defined primarily in terms of cost. Schedule requirements have not been clearly specified in contract. Due to this project might be ahead on costs, but behind schedule.

• Quality is in question, since lower qualified personnel are working on project.

• Reimbursable costs have been tied to billable hours. This motivates the contractor to try and reduce expenses (while making a profit on the incentives) by using lesser experienced employees. This is affecting schedule and possibly quality. Reimbursable costs should have been tied to deliverables rather than billable hours.

• The contract performance period has not been broken down into smaller units to effectively track actual progress (earned value) against a planned progress (planned value). This would allow DIP to hold BAD accountable for any deviations in schedule/costs from the original plans.

• No contract stipulations requiring that BAD only use the personnel initially interviewed for the project. DIP has awarded the project based on interviewing these personnel, and hence, it should have mandated BAD use these personnel only for the life of the