Question

General Construction Company

General Construction Company has a contract to build three lower‐income apartment buildings for the city of Santa Fe, New Mexico. During construction of the first building, the Project Manager formed an auditing team to audit the construction process for each building. He asked the team to develop a list of minimum requirements for the projects and use this as a baseline in the audit. While reviewing the contract documents, one of the audit team members found a discrepancy between the contract mini- mum requirements and the City’s minimum requirements. Based on his findings, he has told the project manager that he has decided to contact the city administrator and dis- cuss the problem.

Question: If you were the project manager, how would you handle this situation? How can a customer be assured of satisfactory project completion?

Answer 1

The member of the auditing team is not following appropriate procedure in contacting the customer directly. The PM should immediately inform top management of both the technical problem with the contract and of the breach of audit procedure. Then the PM should:

o.Contact the client to resolve the problem.

o. Discipline the auditor for his breach of procedure.

2. The customer should:

o. Include such an audit process in the contract, with results coming directly to them, and

o.Require that the audit be conducted by their own people, or an external entity.