Name: Arslan Ahmad Kaleem

Roll No: F16-0605

Class: BSSE 7th B
Submitted to: Mam Rubab
Subject: Software Project Management
Date: 7-11-19
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Roles of contract in software project management

The Project Manager:

As per PMBOK 6th edition section 3.2 (page 91), Project Manager is the person who
leads the team that is responsible for achieving the project objectives. The performing
organization assigns a Project Manager.
Based on the authority level, the project manager performs numerous roles. Many
organizations based on the project size and complexity, assign 'a contract project
manager.' A contract project manager's role is significantly different from the Project
Manager.
Contract Manager:
The Contract Project Manager (also referred to as Contract Manager) plays a very
critical role for an organization. He/she manages contracts throughout the projects and
their life cycle. On many occasions, they also play the role of a Liaoning person
between the companies, employees, vendors, customers. He/she creates the contract’s
repository and is solely responsible for maintaining all the contractual records. The
company uses these records for their projects, which finally become part of Record
Management.
Some of the key responsibilities include but not limited to:
Draft, develop, negotiate and execute the contract.
Create policies and procedures to the contract and ensure the effectiveness.
A Liaoning person and a contract facilitator.
Manage and close the contracts throughout the project duration.
Create a contract repository and update periodically.
Contract Management:
Contract as the term specifies is an agreement between two parties in general. In
project management, it’s a formal agreement between a buyer and a seller (more often
referred to as supplier). The agreement is made to procure goods and services required
for the agreed project. This document needs to be prepared by the Project Manager (or
the contract project manager if assigned). It is in coordination with Procurement
Manager during the project planning stage. It has to be documented as a Procurement
Management plan, which is a part of the primary Project Management Plan.
Contract Management, a part of the Project management, deals with the
vendor/seller/supplier (as termed in the contract). It also manages the procurements
according to the terms and conditions set in the ‘Contract.’ The terms and conditions are
agreed mutually between the buyer and seller.
Contract management is the art and science of managing a contractual agreement
throughout the contracting process.
Though many times the contracts are simple and straight, they are more complex. It
happens to be in larger projects as many procurements and suppliers are involved.
The procurement contract being a formal document must be carefully
designed/planned. It should also be mutually agreed to avoid the complications between
the buyer and the seller. It is all to execute the project smoothly for the timely
completion.
Following are the guidelines to be considered while deciding on procurement contract:
Complexity of procurement
Location of procurement
Availability of suppliers/contractors
Local governing regulations
The above guidelines assist in deciding the type of contract suitable for the project
undertaken. The following are the types of contracts generally followed in Project
Management.
Types of contract:
Most of the contractual relationships are broadly categorized as either:
 Fixed-Price contract
 Cost reimbursable
 Time & Materials Contract
The third type of contract is seldom used.
As mentioned earlier, project type decides the contract type. So, in many projects based
on the procurement requirements, one or two contract types are chosen. To facilitate
the project requirements, they are combined into a single procurement.
1. Fixed Price Contracts:
In this category, the contract involves a fixed price for a defined product or service or
the result to be supplied/provided. These types of contracts are recommended when the
scope of service is completely defined and final.

Here are the different types of Fixed Price contracts used in managing projects:
Firm Fixed Price (FFP):
The prices of the goods and services are set and are never subjected to change unless
the scope is changed and agreed mutually. This type is favorable mostly to the buying
organizations. Because the extent of buying the goods remains unchanged and
recurring buying happens.
2. Cost reimbursable contracts:
This type of contract involves cost reimbursement (payments to the work done) for the
costs incurred during completion of the contractual job. It is along with a pre-defined fee
representing seller profit. It is recommended if the scope of the work is expected to
change during the contract period.

3. Time & Material Contracts (T&M):

This a hybrid type of contract combining the features of Fixed as well as Cost
Reimbursable contracts. This is often used when contractual requirements (scope) is
not known/ prescribed. Also, this type of contract is suitable for acquisition/hiring of
experts, project staff required for a particular period.