1. Read the scenario. 2. Complete the question and exercise section. Hunter - Change Control Paul Shaw is the Director of Project Management for KL Manufacturing, a contract supplier of filter material for HVAC manufacturers. KL Manufacturing participates in various successful projects however, recently the Hunter Company production project was completed three months behind schedule and with a cost overrun of approximately 60 percent. Following submittal of the final report, Paul Shaw, the Director of project management, called a meeting to discuss the problems encountered on the Hunter Project. Paul Shaw: "We are not here to point the finger at anyone. We are here to analyze what went wrong and to see if we can develop any policies and/or procedures that will prevent this from happening in the future. What went wrong?" Production Manager: "When we accepted the contract, Hunter did not have a fixed delivery schedule for us to go by because they weren't sure when their new production plant would be ready to begin production activities. So, we estimated moving forward, they would require 3,000 units per month from month 5 to month 12 of the project. When they found that their production plant would be available two months ahead of schedule, they asked us to accelerate our production activities. So, we put all our production people on overtime to satisfy their schedule. This was our mistake, because we accepted a fixed delivery date and budget before we understood everything." Team Lead: "Our problem was that the customer could not provide us with a fixed set of specifications, until OSHA and EPA requirements were confirmed following initial testing of the new plant. We were asked to commit to man-hours before specifications could be reviewed. Six months after project go-ahead, Hunter Company issued the final specifications. We had to remake 6,000 production units because they did not meet the new specification." Project Manager: "The customer was willing to pay for the remake units. This was established in the contract. Unfortunately, our contract people did not tell me that we were still liable for the penalty payments if we didn't adhere to the original schedule." Paul Shaw: "Don't you fell that misinterpretation of the terms and conditions is your responsibility?" Project Manager: "I guess I'll have to take some of the blame." Team Lead: "We need specific documentation on what to do in case of specification changes. I do not think that our people realize that specifications can change, even in the middle of a contract, and terms for liability should be negotiable. Another concern is the line employees. For nine months, employees working on the Hunter Project got all the overtime they wanted and others, who were not working on this project were unhappy. To make matters worse, the Hunter Company employees got a substantial increase in take-home pay which allowed them to start living beyond their means. Now, that the project is over, they are unhappy and claim we should give them opportunity for more overtime. Everybody hates us." Paul Shaw: "Well now we know some of the issues. Any recommendations for cures and future prevention activities?" Questions & Exercise 1. Who is responsible to review the terms and conditions of a contract for a project? (Provide a reason for your choice)