Contract Creation and Management

Contract Creation and Management

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Contract Creation and Management

Span Systems is a California based software developer. They specialize in custom e-banking programs and have several regional banks as clients. Span Systems was contacted by Citizen-Schwarz AG a very large German bank to develop an e-banking program. Citizen-Schwarz has already ordered another program from Span dealing with e-CRM. The original contract is in its eighth month and many problems have occurred. Both companies must now come together to see if they are going to be able to continue to work together or to go their separate ways.
Citizen-Schwarz’s Needs and Risks
The major need for Citizen-Schwarz is to get the most out of their $6 million contract with Span. C-S needs to have their project remain on schedule and hold true to the quality level that they require. C-S just can’t afford schedule slips because of its deadline for the release of the transaction software in the market (University of Phoenix, 2008). If Span is not able to hold true to the time schedules and levels of quality that they require then C-S will need to find a company that will be able to meet their needs. The major need for C-S is to move forward in their project. They need to be ensured that they have the right people working towards reaching their success.
Citizen-Schwarz is in the process of a huge project that is extremely time sensitive and requires high quality. The risk here is that both of these areas have fallen behind. C-S had a valid argument regarding quality and delay in delivery of code (University of Phoenix, 2008). At the current point they had projected to be nearly 60% done with the project while their actual progress only shows 40% completion. In addition to this the quality that they discussed with Span Systems has not held true. The major risk for C-S is that they may be investing so much time and money into a project that may not completed correctly and on time which could threaten the overall success of their project.
Span Systems’ Needs and Risks
Span System has experienced unordinary change requests for the use program from C-S. The new requirements are difficult to accommodate due to budget and timeline restraints. Adjustments need to be made in the contract to modify current budget and timeframe restrictions.
C-S has been behind schedule in the review process because of internal structural problems.

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C-S’s failure to address process reviews in a timely manner cause Span Systems to fall behind in program development. Adjustments must be made in the review process to allow Span Systems to progress in the program development (University of Phoenix, 2008).

Span System is currently a couple of months behind schedule and the quality of deliverables contains errors in the program. In an effort to please C-S and accommodate the change requests and still adhere to previous deadlines has forced quality to drop. The program defects identified in October were not corrected as of December. Additional resources need to be employed to address the situation before C-S rescinds the contract (University of Phoenix, 2008). The failure to perform on this contract could lead to loss of the e-CRM project for C-S.
Mutual Agreement Contract
If the contract was to be cancelled or terminated then Span Systems would turnover all completed work and work in progress. All materials used in the development of this software program would become property of C-S. This would be contingent on all payments due to Span have cleared.
Change Control
A Change Control Board (CCB) comprised of the project manager, and lead software engineer from Span Systems and Citizen-Schwarz. This board will be able to accept or reject any changes. C-S will compensate Span Systems for any changes added after the contract is signed. The CCB will also be able to determine if the changes being made will increase the scope of the project.
Communications and Reporting
C-S will relocate a program manager to California to establish a direct contact and improve the communication process. The project manager will address issues in the development of the program. C-S will be responsible for the expenses incurred with the cost of stationing the project manager in California. Span Systems will upload daily updates to the company extranet so that authorized C-S employees will be aware of the project status.
Project Structure
Span Systems will increase program production with the addition of 10 programmers to the project. The ramping up of the team will allow Span to meet all deadlines that are set. The acquired expenses of training the programmers will be the responsibility of Span Systems. The resumes from the newly added programmers will be provided to C-S within in seven workdays from effective date of contract.
Dispute Resolution
Every effort will be made to resolve any disputes in a timely manner. An increased involvement by management for both Span Systems and C-S will help resolve any issues. If both parties can not find a solution then both companies agree to use a mediator to resolve the dispute.
Span Systems is a company that has produced great software for several companies. C-S has noticed the fine products of Span Systems and has asked them to build software that would assist the company in becoming seamless in the e-banking department. They have entered into a legal agreement that would all for both parties to benefit. Span Systems has agreed to produce the software with guidance of C-S. C-S has to agreed to pay Span Systems for there time. With the revisions that have been made to the original contract, Span Systems can resume production of the software that C-S requested.
University of Phoenix (2008, Spring). Contract Creation and Management. Retrieved June 29, 2008, from
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