Page 308 - Global Project Management Handbook

PROJECT QUALITY MANAGEMENT IN INTERNATIONAL PROJECTS 15-9

● Wording of the contract may pose challenges when there are different denotations
or connotations for terms used in the contract. This applies whether there are two or
more languages involved or a single language such as English. Take, for example,
the election of politicians to office. In the United Kingdom, politicians “stand” for
office, and in the United States, politicians “run” for office.
● Any laws cited must be applicable to all parties for administration of the contract. It may
be more appropriate to cite processes by which the parties will meet their respective
obligations. An example is to cite the process for dispute resolution using the American
Arbitration Association’s rules rather than cite a venue for a court. Typically, the laws
of a country apply only within the borders of that country.

A flawed contract affects the end result of a quality product when a performing
contractor may not recognize the contractual requirements or that the contract fails for
any number of reasons. A contract that is mutually beneficial to all parties gives the
best chance for completing the work without resorting to enforcement means. The
contract is the vehicle that “carries” quality to the product.

STABILITY OF A COUNTRY’S GOVERNING BODY

Developing countries can have unstable political organizations and governing bodies
that cause major changes in how business is accomplished with external organizations.
Unstable governments may cause new rules and regulations to be applied to perform-
ing contractors that may adversely affect the project. These new rules and regulations
typically will be more restrictive and limiting for the performing contractor.
A risk assessment of the stability of a country’s political situation and governing body
should be accomplished prior to entering into a contract for products or services. This is
especially important if a critical part of the project is to be performed in that country.
An example of the risk one might encounter was demonstrated when a water tower
was constructed without consulting the local government. The water tower created an
effect whereby a statue of the wife of the chief of state blended into the color of the
water tower. Local officials demanded that the water tower be dismantled. The chief
of state favorably ruled that if the water tower was painted a color that contrasted with

the statue, the structure would not detract from the statue. The difference between the
two solutions was several hundred thousands of dollars.
Projects in countries with stable governments have a greater chance of delivering a
quality product than in an environment where dysfunctional government is present.
Dysfunctional activities in the government typically flow over to businesses and any
ongoing project. Interrupted work, labor strikes, vandalism, and the like can create a
situation whereby a project cannot be completed to deliver a quality product to the
customer.

TAXES AND TARIFFS

Levies of taxes and tariffs on goods produced in a country can add significantly to the
overall burden on the project. Any additional costs that are typically outside the con-
trol of the supplier must be included in the profitability equation. For example, coun-
tries may charge taxes or tariffs on a product, whether whole or a part, for export to or
import from another country.