Risk in Bidding Rough Draft Projects

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Words: 476

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Category: Business and Industry

Date Submitted: 09/21/2011 07:33 PM

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• In my opinion the companies should have more than just rough and estimated draft specifications.

• Rough draft implies the project doesn’t have clear specified goal and still thorough planning is required. Hence bidding on rough draft projects can turn out to be a risky venture.

• When the company that requests the project itself does not have any goal, it’s clear that the company that accepts the project also does not have a goal leading to cost overrun, unable to meet deadlines.

• Rough draft specifications means changes in between which result in changing of schedule purchase of raw materials unplanned for resulting in a cost overrun. This will affect the project’s progress and if the project it firmed fixed cost then the effect is even worse since the cost overrun comes from the company’s account.

• Lack of accurate information gives rise to an unclear definition of scope and unclear definition of requirement and these are the principal cause for cost overruns. When accurate information and definite requirements are not collected at the initial phase, the scope cannot be well defined and thus accurate estimate cannot be determined and the resources needed are not properly planed for. This may be due to unclear objectives about what the project entails to know the kind of questions to ask and what kind of information to gather for a well robust scope definition. At times it could be seen from the perspective that management lacks the effort to strive for the collection of optimum information for the definition of requirement and scope which is not a good management practice.

• Corwin was in the same situation and never known for its engineering capabilities and to top it all, Peter’s company gave them a rough estimate instead of full specification details.

• Moreover the decision on an acceptance of a project work should be unanimous. Corwin’s most employees were on vacations and most importantly the presidents and vice-presidents were not present and...