Ivey Systems Ltd. (ISL) was awarded a ten-year contract to provide an IT system used in the detection and prevention of computer related offences used by specialist divisions of Government. To the public and the media the contract was described as being won by 'Cyberia' a consortium of internationally respected security organization who would be working with the Government in a partnership to counter 'cyber crime'. The consortium was actually ISL acting as the prime contractor with a number of subcontractors covering facilities management, building construction, software development, data centre management, and systems integration. Twelve months into the contract, it has become clear that the relationships between all the parties are failing. ISL has deliberately kept the Government representative and the subcontractors apart from each other, despite their requests to involve each other in resolving technical issues. No payments have been made by the Government for 6 months, using the reasons that contractual performance is not being achieved. Following a crisis meeting with the Government, ISL's Managing Director, Geoff Miller, agreed to remove the current project manager and the Government agreed to provide a new Senior Responsible Officer (SRO) who would manage the contract to eliminate any personality issues that may be at the root of the relationship problems. The Government issues were:  Milestones were late or inadequately completed.  Costs of contract changes were excessive.  Ivey responses to contract changes always sought relaxation on previously agreed service levels. ISL complaints included:  The Government is moving the contract 'goal post' by changing the acceptance criteria.  Decision making was excessively long and impacted on deliverables.  The number and volume of contract changes required large amounts of rework for which the Government refused to pay. The subcontractors' complaints included:  ISL were not communicating the Government requirements adequately.  ISL were late in paying invoices (often 60 days late)  Too short notice giving approval for work done and for any changes in requirements. You have been appointed the new Project Manager for ISL, and you have invited the Government and the subcontractors to separate meetings to discuss a way forward.

As the new Project Manager, in considering a resolution to the problem:

1. What do you believe that ISL, the Government, and the subcontractors could have done differently?

2. What other actions do you consider could help resolve the issues?

3. How would these other actions affect contractual matters?

4. How would you improve relationship management?