You are the PMO Director for World of Wonder. One of the ✓ Solved

You are the PMO Director for World of Wonder. One of the programs managed by the company is a high visibility both for the government and your company valued at $1B. Your company currently does not have a contractor management process and your program has three subcontractors. Define processes as covered in this Unit to assist WW to properly manage the subcontractors.

The government decided to divide the contract for the design, development and production of a new radio into two separate contracts. One contract would be for the design and prototype development of the radios and it would be led by a Lead System Integrator (LSI) company. This was Contract A. The second contract, Contract B, would be issued upon completion of Contract A and would be to produce multiple units of the selected prototype.

Both contracts would be re-competed so vendors who won Contract A not necessarily were guaranteed to produce the radio during Contract B. At the time the contract was let, the requirements were not finalized. World of Wonder was selected to be the LSI. Company World of Wonder (WW) had extensive defense and lead systems integration experience. WW was collocated with the government customer, so it made it easy to participate in weekly status reviews and be able to resolve any issues.

Three companies were selected as subcontractors. Two subcontractors were selected for the design and prototype development phase of now two different radios. Both had extensive hardware experience and defense expertise. Both companies were known defense competitors who had great interest of being LSI under contract B and be able to win the production of their own radio.

Both companies had no interest in having WW be part of the management team during Contract B. Company Nanotech would develop a version of the radio at a contract value of $400M. They had a local presence. Company DistributeX would develop the second radio. They were remote. They received a contract valued at $400M. The third subcontractor would generate all the logistic support requirements. This subcontractor was a business unit from a separate company under WW, named MiniWorld. The contract value for MiniWorld was $25M. The remaining CV was allocated to WW.

The government would then choose the design that would go into production. The third subcontractor was a division of the LSI within a separate company. The contract was valued at $1B and it was a CPAF. The LSI named a Vice President to lead the complex technical program. There were three subcontract program managers who reported to the Director of Subcontract Management. He reported to the Program Vice President. The subcontract managers would manage the day-to-day interaction with Nanotech, DistributeX, and MiniWorld.

As time progressed both contractors developing the radios were over running in cost and behind schedule. The program was managed with Earned Value Management techniques. The Director spent most of his time addressing fire drills with the VP. Every day there was a different issue. The VP was known for throwing temper tantrums. All internal reviews were shouting matches.

Both Nanotech and DistributeX started running into design problems. WW costs were also increasing because they had to micromanage Nanotech and DistributeX closely to be able to contain the cost and meet schedule. Earned value was assessed on a weekly basis. WW also ran into relationship problems with the customer. Funding was not flowing to WW as expected which in turn meant that funding to all subcontractors was also late.

Nanotech was managed by a seasoned program manager who was not afraid to hold Nanotech accountable or speak her mind at executive meetings. She properly balanced the views of the subcontractor and the views of her company. The VP would have preferred she always agree with him at all cost. DistributeX was managed by a subcontract manager who lived in Arizona but during the week returned to San Diego to manage the contractor. He was notorious for attending meetings and avoiding actions. Overtime was not in his schedule.

MiniWorld was managed by a relocated program manager who had been in the company for close to twenty years and was counting down days to his retirement. He never volunteered to take the slack from anyone else on the team. There was no specific way to rate the performance of the subcontractors. All three subcontract managers had a good relationship with WW Director but the Director would lack backbone to tell the VP when he disagreed with his approach and back up his team.

At least four subcontract program managers were victims of the execution of the contracts. The program was re-baselined twice in a course of two years. meaning all CPI and SPI was reset. Upon execution of both re-baselined efforts, within a couple of months once again, all subcontractors were having cost, technical and schedule problems. However, Nonotech had been able to develop a limited prototype which could only meet 5 of the 8 communication requirements.

Nanotech also had the habit of communicating directly with customer without going through WW. Many times WW was requested to meet with the customer based on information provided by Nanotech. Both Nanotech and DistributeX issued stop work orders whenever their funding was late. Both Nanotech and DistributeX were subcontractors to each other for a portion of their individual contracts. It was a full web of horrors.

Nanotech hired DistributeX’s testing division and DistributeX hired Nanotech’s metal construction division. After three years of challenges with cost, technical and schedule problems, the program was eventually cancelled. The director was demoted and the government representative retired.

What went wrong? What could have been done internally at WW? What could have been done to properly managed the subcontractors?

Paper For Above Instructions

The failure of the World of Wonder (WW) high-visibility program underscores significant shortcomings in subcontractor management practices. The disarray encountered was not merely the result of subcontractor inefficiencies but also reflected fundamental issues in project leadership, communication, accountability, and process management. Analyzing the pitfalls helps present frameworks for effectively managing subcontractors in high-stakes projects. This paper explores what went wrong, possible internal improvements at WW, and effective subcontractor management practices that could have averted the failures.

What Went Wrong?

Several critical factors contributed to the program’s unraveling. Firstly, the project suffered from poor scope management. The initial lack of finalized requirements led to confusion over expectations and deliverables, thus compromising project integrity. Dividing the program into separate contracts (Contract A and Contract B) may have been strategically flawed if requirements were ambiguous. This decision fractured accountability, allowing subcontractors to engage in competitive behavior that undermined collaboration (Kerzner, 2017).

Communication lapses were a crucial issue. Nanotech’s direct communication with the government, bypassing WW, eroded the PMO’s authority and led to misaligned expectations. Clarity in communication channels is essential in project management, particularly within complex subcontracting environments (PMI, 2018).

Moreover, the leadership dynamics significantly impacted the project. The VP’s erratic management style fostered a toxic culture, leading to shouting matches that discouraged open communication (Goleman, 2000). The subcontract managers at WW lacked the authority and support to challenge the VP’s decisions, creating an environment where accountability was diluted, and subcontractors felt empowered to disregard WW’s oversight.

Lastly, inadequate performance measurement frameworks failed to evaluate or motivate subcontractors effectively. Without specific criteria to assess their performance, subcontractors operated without clear incentives to stay on track (Morris & Pinto, 2020).

What Could Have Been Done Internally at WW?

WW could have implemented several internal changes to bolster the management of the subcontractors. Firstly, establishing a robust contractor management process would create clarity in roles, expectations, and communication paths. A structured approach to contractor processes, including regular performance evaluations and clear contracts defining responsibilities, would minimize ambiguities (Harrison & Lock, 2017).

Additionally, proper stakeholder management is crucial. Engaging subcontractors in collaborative discussions and establishing mutual interest in project success is essential. Organizing workshops to align goals and establish joint accountability could have enhanced cohesion among the subcontractors and WW (Kloppenborg et al., 2019).

Furthermore, enhancing the skills and capabilities of the subcontract managers is vital. Offering management training focused on negotiation, communication, and conflict resolution can empower them to address challenges effectively and assertively (Cleland, 2018).

Effective Subcontractor Management Practices

To ensure subcontractors are properly managed, certain practices should be emphasized. Establishing clear contract terms is critical, specifying accountability mechanisms, performance metrics, and escalation procedures. Involving subcontractors in the planning phase nurtures a sense of ownership and commitment (Pinto, 2016).

Regular communication must be maintained to establish relationships built on trust. Performance reviews should be conducted regularly, ensuring alignment and addressing challenges before escalating into larger issues (Kerzner, 2017). Additionally, instituting a collaborative project management tool can maintain transparency and update all stakeholders in real-time, allowing swift resolution of emerging problems.

Finally, the use of strategic scorecards can facilitate a systematic approach to performance evaluation. By defining key performance indicators (KPIs) unique to each subcontractor's role, assessing their contributions can provide insights into required interventions and foster continuous improvement (Morris & Pinto, 2020).

In summary, the situation at WW illustrates how critical robust management practices and leadership are to successful subcontractor relationships. By addressing internal culture, enhancing communication, and implementing structured management processes, WW could transform its future projects' outcomes.

References

• Cleland, D. I. (2018). Project Management: Strategic Design and Implementation.
• Goleman, D. (2000). Leadership That Gets Results. Harvard Business Review.
• Harrison, F., & Lock, D. (2017). Advanced Project Management: A Structured Approach.
• Kerzner, H. (2017). Project Management: A Systems Approach to Planning, Scheduling, and Controlling.
• Kloppenborg, T. J., et al. (2019). Project Management: A Real-World Approach to Project, Program, and Portfolio Management.
• Morris, P. W. G., & Pinto, J. K. (2020). The Standard for Project Management, A Guide to the Project Management Body of Knowledge.
• PMI (2018). A Guide to the Project Management Body of Knowledge (PMBOK® Guide).
• Pinto, J. K. (2016). Project Management: Achieving Competitive Advantage.
• Project Management Institute. (2018). Organizational Project Management: A Global Perspective.
• Project Management Institute. (2021). Pulse of the Profession: The High Cost of Low Performance.