Contract Management vs Project Management

In some organizations, Contract Management forms part of the Commercial Operations or the Procurement function where contract managers are responsible for ensuring that terms and commitments agreed in the contract are adhered to. Contract Managers are also generally responsible for ensuring that projects are delivered on budget or delivered profitably.

A global Engineering firm won major $5 billion project, which was delivered on time and in accordance to the Statement of Work, but the company ended the project with a $1.2 billion loss. An internal inquiry concluded that poor contract management and not poor project management was to blame.

With large projects, there may be some cross-over or confusion of roles between the Contract Manager and the Project Manager.

A simple way to look at this would be to assume that the responsibility of the Contract or Commercial Manager is to look after the economics of the deal or project and to manage claims and disputes against the contract. The Project Manager’s role is to coordinate and manage all aspects of the project to ensure that it is completed on time and in accordance to the specification.