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Projects have always been part of our lives; in schools, workplaces, and even at homes. Projects are unique, and they are meant to be completed within specific constraints. These constraints include budget, resources, time, among other factors. Hence, the reason for a project management professional is to initiate, plan, control, monitor, and close a project successfully in the business world. In that case, nothing happens if you have not signed a contract.

Else, you may carry on with the project at a cost should anything go wrong in the course of execution. Every manager needs a solid project management contract template to work with customers. 

A project management contract is an agreement between a project manager and an employer or owner. You don't want to be involved in managing a project that would cost you a fortune because you sealed the agreement with a handshake rather than a written contract. A project management contract template is useful because you don’t have to start crafting one at the eleventh hour of sealing a contract.

You want to ensure there's a solid template on the ground that you can always edit to make a particular need. If you have none, there's no need to worry. You can either download a ready template from our gallery or get quick tips to create your own.

Project Management Contract Template
Image Credits: andrewazzopardi.org

Read on to find out about the basic information in a project management contract, writing a project management contract template and what information to include.

A robust project management agreement captures major information needed for decision making regarding the project. These include the deliverable, scope and strategies, compensation, performance measure, timeframe, authorization, among others. Let’s see the information in each section of a project management contract template.

1. Introduction in the project management contract

Include a title page that identifies the document as a project management contract, then identify the parties involved in the agreement. Add personal information of parties, including name, contact and mailing address, and phone number.

2. Executive summary in the project management contract template

Just like the name, summarize the problem, goal, and objective of the project so that a ready can rapidly grasp what the document is all about without going through the entire write up.

3. Detailed project scope in your project management contract sample

The project's purpose is to achieve a planned functionality in carrying out the project within its constraints. Hence, the need for a comprehensive definition of functions and deliverables.

Project Management Contract Template Sample
Image Credits: formsbirds.com

4. Schedule in the project management contract template

The contract has to specify the project start and completion date. It is advisable to break down the project into manageable bits and assign milestones to them. A better schedule gives room for effective tracking and monitoring of delays.  

5. Compensation in your project management contract

A project management contract must include payment and other expenses associated with the project. It includes project management fees and pricing models. Settlement may take into account whether the project is an on-time activity or recurring type.

6. Limitation of liability in the project management contract template

This is the section of the project management contract template where you add a clause that limits the amount of exposure you face or liability in cases of damages or loss when performing your duty. As a project manager, you want to know if the project has insurance cover for personnel and resources before agreeing to take up the job.

7. Performance measure in the project management contract sample

A good project management contract gives room for rewarding superior performance. Hence, define indexes to measure performance and to track the progress of work. Your performance index may also be useful to the client in measuring profitability or carrying out a cost-benefit analysis.

A project manager is an independent professional who is employed to perform a broad range of services. These may include planning, budgeting, controlling, and documenting all aspects of a specific project.  If you work as a project manager for a client, you will act on behalf of your employer and ensure you adequately manage the project/service of your client. To do that effectively, you’d need to write and get the client to sign a project management agreement with you.

The agreement is a contract that obligates you as the project manager and the contractors involved to provide the deliverables of a project. Also, the agreement also obligates the client or owner of the project to pay for the services and bear the cost of materials needed to achieve its goal. It is important you have a project management agreement in place before commencing any job because of there no legal contract without the agreement. 

Project Management Agreement Template
Image Credits: biztree.com

The task requiring your service as a project manager may be simple or complex, depending on the nature and scope of work. The complexity of the review process of a project management agreement varies with scope as well. A complex project belonging to a large organization may be subjected to a series of public review. At the same time, that of a small business may require just the owner and the project manager to review the agreement.

There are no hard and fast rules to project management agreement writing. The content of the agreement is often dependent on the scope and complexity of the project management contract type. We will give you the basic information that should be captured in your agreement irrespective of the nature or scope of the project. 

Project management agreement outline - the following section should be captured in a typical agreement template:

1. Title page in your project management agreement

The agreement should start with the introduction of parties after stating that it is a project management agreement. The document has to define the date the agreement would take effect between the owner and the project manager. It must contain your business name, mailing address, contact address, and the phone numbers of parties involved. 

2. Table of contents in your project management agreement template

Overview and table of content are applicable if the document is a multi-paged agreement. 

3. Executive summary in your project management agreement template

Make a statement about customer issues and the solution/service you have proposed to provide.  

4. Project details in the project management agreement example

You should describe the specific project management service you’ve been employed to render. Also, give brief information on your strategy, benefits, and budget in your project management agreement. 

5. Pricing in the project management agreement sample

The agreement should include details about fees and pricing models. Fixed contracts, also known as lump sum contracts, may be charged as a one-time service. If the project is a recurring type, you may consider a different pricing model and request a retainer fee.

Project Management Agreement Template Sample
Image Credits: sampletemplates.com

6. Performance measure in your project management agreement template

Define key performance index to measure how well you are doing in the project. This would help your client to measure how profitable the project is compared to its expenses.

7. Limitations & liability in your project management agreement template

This section makes a provision in your project management agreement, limiting your liability to potential damages and loss during the course of carrying out your service. 

8. Terms and conditions in the project management agreement sample

This section captures other conditions that have not been captured in other parts of the agreement. 

Tips to create a watertight project management agreement 

  1. Negotiate and ask specific questions about the project
  2. Document your negotiations. 
  3. Define terms 
  4. Keep it simple
  5. Plan for disputes
  6. Answer questions about conditions for termination 
  7. Work with a solicitor to review and add what you’ve missed
  8. Link payment to performance
  9. Don’t start until the agreement is signed

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