A project manager is six months into a multi-year project. The project requirements have not changed, and the initial suppliers have been performing as expected. A team member suggests that since the scope is stable, there is no need to perform the scheduled semi-annual contract reviews. What is the project manager's best course of action?
Agree with the team member to save administrative effort, as both requirements and supplier performance are stable.
Postpone the reviews and only conduct them if a risk or issue with a supplier materializes.
Proceed with the scheduled contract reviews to assess ongoing performance, risks, and external market conditions.
Cancel the formal review but have an informal check-in with the suppliers to maintain the relationship.
The correct response is to conduct the scheduled contract reviews. Contract administration is an ongoing process throughout the project's life cycle. Even with stable requirements, it is essential to periodically review contracts to assess supplier performance, identify and mitigate new risks, and adapt to any external changes such as marketplace conditions, which can affect costs and value.
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Why are scheduled contract reviews necessary even if supplier performance and requirements are stable?
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How can external market conditions impact a project contract?
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