Recogonizing Contract Risk and Opportunities

Running Header:   Recognizing Contract Risk and Opportunities Memo

Date:   August 2, 2010
TO:   InfoBuild Managers
RE: Contractual Conflict with C-S

This memo is specifically for all managers of InfoBuild regarding the recent contractual conflicts with C-S.   C-S is one of our biggest clients, however recently C-S has disputed the quality of deliverables, schedule adherence for deliveries and end user requirements.  
Majestic is disputing the quality and delay in the delivery of code and substantial performance of the contract based on time elapsed.   In order to combat these issues going forward, we must make sure that we are abiding by the contractual terms and conditions to which we agreed when signing the contract.   As an incentive for us to make sure that we are abiding by the terms and conditions of the contract as it pertains to a delay in the delivery of code we have elected two options for each manager to use at their discretion.   The first option is to hire a contractor to help assist in making sure that the code is delivered in a timely manner.   The whole issue with the delay in the code being delivered is the fact that we do not have enough time to test the code before it is delivered because we have a shortage in staff and available man hours.   This shortage has caused us to almost lose our contract; however through the addition of a contractor, we should be able to meet the deadlines set forth in the contract.   As well, another option is to mandate overtime for the software/code department.   Although this may seem a bit harsh, it does have its benefits as it offers the employee a chance to earn extra income as well as giving the employer a chance to meet their guidelines.   We do realize that the offering of overtime and the option of hiring a contractor will increase the expenditures of a department, however the short term expenditures are outweighed by the long-term goal of staying compliant with the terms and conditions of the contract.