Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 6, Issue 12;   March 22, 2006: Dubious Dealings

Dubious Dealings

by

Last updated: November 23, 2019

Negotiating contracts with outsourcing suppliers can present ethical dilemmas, even when we try to be as fair as possible. The negotiation itself can present conflicts of interest. What are those conflicts?

Andrew stopped outside Jane's door and knocked on the doorframe. Her back to him, studying her screen, Jane must have somehow recognized Andrew's knock. "Andrew," she said without looking up. "One sec."

A cup of coffeeShe half-stood, still holding the mouse and staring at the screen. Then she clicked, stood up straight, and turned to face him. "OK," she said. "Where to?"

"Courtyard," Andrew replied.

They walked silently to the elevator, rode it to One, crossed the lobby, went out into the brilliantly sunny courtyard, and sat down at an empty umbrella table. Jane still had her coffee mug in hand. She sipped.

"So…" she prompted him.

"This contract bothers me," Andrew began. "I'm a project manager. I don't know much about negotiating contracts. I'll probably do something dumb, but I'm not sure that's what bothers me."

Managing a project for which
you negotiated contracts
presents a conflict of interest
Andrew wasn't sure, but Jane was. She'd been there. "Right," she began. "The real problem is that project managers shouldn't be negotiating contracts. It's a conflict of interest."

Jane's insight isn't widely shared, but she does raise a critical point. Project managers who must monitor day-to-day performance of contracts they personally negotiated have a potential conflict of interest. Here are some of the ways this conflict can appear.

Vulnerability to time pressure
Especially if negotiations drag on, the organization might apply pressure to the negotiator to bring negotiations to completion. For those project managers who are also the negotiators, this pressure can lead to a temptation to yield, based on a belief that we can "close the gap" through cleverness during project execution.
When project manager and negotiator are separate people, the project manager can better represent the project's interests, insisting on what is actually required, and compelling more creative negotiation.
Hidden cost transfers
During negotiations, it's common to entice the vendor with the promise of work on future projects. But when the negotiator manages both the project at hand and the future project, this tactic amounts to a transfer of resources between the two projects. It distorts the costs of both, invalidating the metrics used to manage projects.
When the negotiator and project managers are independent, each contract is more likely to stand on its own.
Concealed contract flaws
When there are flaws in the contract that become evident only during execution, and when the negotiator has gone on to become the project manager, it is the project manager who must report defects in the contract that he or she produced. It can be tempting to find a way to avoid reporting a flaw of one's own creation.
When the negotiator and project manager are independent, contract flaws are more likely to be reported, and remedial action is possible.

Even considering whether or not we have a conflict of interest can be problematic. Since we don't want to believe we have a conflict of interest, we do. Go to top Top  Next issue: When You Aren't Supposed to Say: I  Next Issue

Rick BrennerThe article you've been reading is an archived issue of Point Lookout, my weekly newsletter. I've been publishing it since January, 2001, free to all subscribers, over the Web, and via RSS. You can help keep it free by donating either as an individual or as an organization. You'll receive in return my sincere thanks — and the comfort of knowing that you've helped to propagate insights and perspectives that can help make our workplaces a little more human-friendly. More

52 Tips for Leaders of Project-Oriented OrganizationsIs your organization running at peak performance? If not, sometimes the design of its job descriptions could be the culprit? For some novel ideas for elevating performance in your organization, check out my tips book 52 Tips for Leaders of Project-Oriented Organizations.

Your comments are welcome

Would you like to see your comments posted here? rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Ethics at Work:

A view of the damage to the Apollo 13 Service ModuleThe Attributes of Political Opportunity: The Finer Points
Opportunities come along even in tough times. But in tough times like these, it's especially important to sniff out true opportunities and avoid high-risk adventures. Here are some of the finer points to assist you in your detective work.
The molecular structure of Oleic Acid (a cis fat, top), and Elaidic Acid (a trans fat, bottom)Some Truths About Lies: III
Detecting lies by someone intent on misrepresentation is an important skill for executives, managers, project managers, and just about anyone involved in knowledge-oriented organizations. Here's Part III of our little collection of lie detection techniques.
A hot dog with mustard on a bunCounterproductive Knowledge Workplace Behavior: II
In knowledge-oriented workplaces, counterproductive work behavior takes on forms that can be rare or unseen in other workplaces. Here's Part II of a growing catalog.
Tree rings, "documentary" evidence of past environmental conditionsOn Reporting Workplace Malpractice
Reporting workplace malpractice can be the right thing to do. And it's often career-dangerous. Here are some risks to ponder before reporting what you know.
A happy dogMore Things I've Learned Along the Way: IV
When I gain an important insight, or when I learn a lesson, I write it down. Here's Part IV from my personal collection. Example: When it comes to disputes and confusion, one person is enough.

See also Ethics at Work and Project Management for more related articles.

Forthcoming issues of Point Lookout

A model of a space station proposed in 1952 by Wernher von BraunComing January 29: Higher-Velocity Problem Definition
Typical approaches to shortening time-to-market for new products usually involve accelerating problem solving. Accelerating problem definition can also help. Available here and by RSS on January 29.
Three gulls excluding a fourthAnd on February 5: Unrecognized Bullying: I
Much workplace bullying goes unrecognized. Three reasons: (a) conventional definitions of bullying exclude much actual bullying; (b) perpetrators cleverly evade detection; and (c) cognitive biases skew our perceptions so we don't see bullying as bullying. Available here and by RSS on February 5.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

Reprinting this article

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

The Power Affect: How We Express Our Personal Power

Many The Power Affect: How We Express Personal Powerpeople who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.
If your teams don't yet consistently achieve state-of-the-art teamwork, check out this catalog. Help is just a few clicks/taps away!
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.