Question

1.In June 1993, Kombs Engineering had grown to a company with $25 million insales. The business base consisted of two contracts with the U.S. Department ofEnergy (DOE), one for $15 million and one for $8 million. The remaining $2 millionconsisted of a variety of smaller jobs for $15,000 to $50,000 each.The larger contract with DOE was a five-year contract for $15 million peryear. The contract was awarded in 1988 and was up for renewal in 1993. DOEhad made it clear that, although they were very pleased with the technical performanceof Kombs, the follow-on contract must go through competitive bidding bylaw. Marketing intelligence indicated that DOE intended to spend $10 million peryear for five years on the follow-on contract with a tentative award date ofOctober 1993.On June 21, 1993, the solicitation for proposal was received at Kombs. Thetechnical requirements of the proposal request were not considered to be a problemfor Kombs. There was no question in anyone’s mind that on technical meritalone, Kombs would win the contract. The more serious problem was that DOErequired a separate section in the proposal on how Kombs would manage the $10million/year project as well as a complete description of how the project managementsystem at Kombs functioned.When Kombs won the original bid in 1988, there was no project managementrequirement. All projects at Kombs were accomplished through the traditional organizationalstructure. Line managers acted as project leaders.In July 1993, Kombs hired a consultant to train the entire organization inproject management. The consultant also worked closely with the proposal teamin responding to the DOE project management requirements. The proposal wassubmitted to DOE during the second week of August. In September 1993, DOE provided Kombs with a list of questions concerning its proposal. More than 95 percent of the questions involved project management. Kombs responded to all questions.In October 1993, Kombs received notification that it would not be grantedthe contract. During a post-award conference, DOE stated that they had no “faith”in the Kombs project management system. Kombs Engineering is no longer in business 1. What was the reason for the loss of the contract? 2. Could it have been averted? 3. Does it seem realistic that proposal evaluation committees could consider project management expertise to be as important as technical ability? *

Answer 1

1. Reason for the loss of the contract.

Going through the case study and analyzing the problem, the conclusion regarding the reason for the loss of contract is majorly the poor project management system of Kombs Engineering.

Kombs Engineering was a company which is having a strong technical ability and base. But coming to the project management ability, they were not having the minimum strength to get the same done in a proper and fruitful manner.

A project management system means the system to manage the project by planning, organizing and managing different requirements and the aspects of the project. This may include the following;

- Estimation of the costs and budgets

- Scheduling the activities to be done

- Resource Allocation

- Quality and Risk management

- Change Control

- Decision making Managing.

            Hence, the disability of Kombs Engineering to answer the questions asked by DOE (95% of which was regarding project management system) despite of hiring officials and training its team on proper project management as the reason for the loss of contract.

2. Could it have been averted?

This question can be viewed from two sides;

a. The loss of project could have been averted or prevented provided Kombs Engineering was able to answer the questions of DOE which was 95% based on project management in such a manner that they can handle such a big project not just from the aspect of technicality but also the perfect management of the same by reducing the wastage and costs.

b. This loss cannot be prevented as they have hired officials and got the team members trained which was only a theoretical thing. This was not practiced in real yet and is only in their books. Without gaining an experience for atleast 6 months with respect to the training received they won’t be able to face the practical questions thrown by DOE as presently they are not in a position to do experimentation by renewing the contract with Kombs.

         And to conclude, in my opinion I think it could not have been averted as for now.

3. Does it seem realistic that proposal evaluation committees could consider project management expertise to be as important as technical ability?

It seems realistic that the proposal evaluation committees could consider the project management expertise to be as important as technical ability.

Let’s understand the same through an example:

A student who is doing a lot of hard work and effort in his/her studies are said to be successful when he/she is able to express the same in the test sheet within the time limit of say 3 hours given. And this involves the knowledge of the topics say the technical side and also the proper management of the time available and the resources available such that he/she answers the relevant questions with the relevant points.

Same way having the technical ability alone would not do justice to winning and completing a project successfully. This would include the proper allocation and execution of the plan as made and put proper controls and corrective actions wherever required.

Thus the proposal evaluation should give proper place for the project management expertise along with the technical ability.