For those of you that haven’t heard the expression ‘drawn on to the sword’ it refers to a scenario where a Contractor doesn’t remedy its poor performance, but rather sits back and waits for the desperate employer to rush in with ‘help’ in the form of directions and resources.
The Contractor then relies on those ‘directions’ to secure variations (to get them off the hook or at least muddy the water) or receive free help in the form of additional resources, which they wouldn’t have otherwise been entitled to under the Contract.
So, here’s the question, as an employer should you offer help, or do you simply sit back and watch the car crash unfold?
It’s a dilemma Lewis Woolcott often faces, so we thought we would share a few tips on how to lend the struggling Contractor a hand without inflicting contractual injuries:
- Try to enforce your rights – The first question to answer is, have you tried to enforce performance using the contract? It may be that the Contractor didn’t realise they were coming up short. If the Contractor is aware of the issue and is failing to ‘up their game’, some gentle contractual pressure may cure the problem without the need for you to step in.
- Establish if it’s a problem that you are capable of helping with – The chances are you awarded the contract because you understood the Contractor to be more capable of delivering the works than your own organisation – has this changed since the award? Before you rush in to help, consider if your organisation has the expertise to help or will you simply get in the way (like a president at a natural disaster).
- Is it really the failure of the Contractor? – It could simply be that the Contractor is coping well under very challenging circumstances and deserves a little credit! Maybe your help will only exacerbate a problem that the Contractor is doing everything humanly possible to contain.
- Scope the ‘help’ – This tip really can be summarised as good change management. Understand the scope and potential impact of the help. Consider what new risks may be created. Document, coordinate and agree on the scope of the help.
- Use the contract – If possible, find an existing contractual mechanism to administer the support. Not using the contractual mechanisms results in administrative uncertainty and may result in disputes if things don’t improve. Equally, contract amendments can be time-consuming and contentious and may stress an already distressed project even further.
- Monitor performance – make sure that the corrective actions can be measured and tracked for effectiveness. If there’s no discernible improvement or things get worse, stop helping. If you withdraw the help, coordinate the withdrawal.
These tips aren’t guaranteed to mitigate the ‘drawn on to the sword’ risks. Remember, every time you introduce change or add an additional interface, you add risk.
Think carefully before taking these steps (don’t rush in), and think even more carefully if your project’s value is greater than $1 billion. Data suggests that it’s almost impossible to change the negative direction of these juggernauts – they have a very large turning radius.