Home Work - Case Studies

8 - HEAVY OPERATIONAL UNINTERRUPTED SECURITY ELECTRONICS

Heavy Operational Uninterrupted Security Electronics (HOUSE) designs and installs security systems for commercial and industrial companies. HOUSE has a multi-million-dollar contract with Oversea Underwater Transport (OUT), a conglomerate that has 3 major manufacturing shipyards, to install extensive security systems to meet Federal Security requirements. Due to recent security problems at these shipyards, OUT wants the new security systems installed as soon as possible so they can bid on future Federal Government contracts. The contract between OUT and HOUSE contains a liquidated damage amount of $100,000 for not meeting the performance requirements on a specified completion date. Should HOUSE not meet that date then every week late OUT will assess an additional $5,000 per week. Albert Pennyworth is the Project Manager for HOUSE.

HOUSE procures the motion sensors required for its current design of the security system from an outside supplier Northern Open Greenfield Operations Outsource Development (NG). Ted Damsons Procurement Manager from HOUSE awards an FFP contract to NG for supplying the motion sensors required for the new shipyard contract. NG has developed a new type of motion sensor that appears to have much better detection capabilities than products offered by other suppliers and is less expensive than what they have produced in the past. The delivery of the motion sensors is a critical activity for the completion of the project since HOUSE has substantial work that is performed after the installation of the motion sensors. The contract calls for the motion sensors to be delivered 14 weeks after the date of contract award from HOUSE to NG.

Tom Beck, the Construction Manager for HOUSE calls Albert and asks why the motion sensors have not been delivered. The current date is 2 weeks after specified delivery date in the contract for the sensors. Albert schedules a meeting with Ted to determine what can be done with NG to expedite the completion of the sensors.

Develop your approach using the case analysis form: Major Facts, Major Problems, Possible Solutions, Choice and Rational.

Management of Project Procurement, C. L. Huston, The McGraw-Hill Companies, Inc. CS 23-2