Corwin Case Study

1) Should companies risk bidding on projects based upon rough draft specifications? Explain your answer in detail.

In my personal opinion, no company should risk on bidding on projects based upon rough drafts. As the case has outlined, Peters Company did not have a defined outline for their request, while Corwin was not adept at the time with their “do not rock the boat” policy. Corwin made some major mistakes in its handling of the Peters project. The first mistake was in its project selection process. New product development does not fit within Corwin’s conservative, risk-adverse market expansion focus. Although Corwin had a product selection policy in place, they did not formally evaluate the request from Peters against the policy. Instead, management at Corwin allows the 5-year profit sharing incentive to influence negatively its decision making process. If Corwin had of followed its policy and process, the project might never have been accepted. Some organizations get influenced by the profits they might make in the future with follow on contracts and by building new relationships. What they fail to understand is that they will be spoiling their relationship with customers if they can’t come through their commitment. We also see in the case that Corwin agreed to a fixed price contract the vendor taking the majority of the financial risk. As such, the guidelines were not clear, and Corwin was not sure if they could meet the requirements under the given price. Without clear guidelines, the customers can change their requirements at any point, making the project slow down and the cost shoot up. This is what happened in the case, when the cost increased to $267,000. Project planning is the heart of the project life cycle, and tells everyone involved where you’re going and how you’re going to get there. The planning phase is where the project plans are documented, the project deliverables and requirements defined, and the project schedule created. It involves...