PM3110 Chapter 14

Question 1

Arbitration

Answer 1

formalized system for dealing with grievances and administering corrective justice to parties in a bargaining situation. It is used to obtain a fair settlement or resolution of disputes through an impartial third party.

Question 2

(BOT) Build, Operate, and Transfer

Answer 2

a method for allowing the eventual owner of the project to mitigate risk in the short run.

Question 3

(BOOT) Build, Own, Operate, and Transfer

Answer 3

the project contractor takes initial ownership of the plant for a specified period to limit the client’s financial exposure until all problems have been contractually resolved.

Question 4

Default claims

Answer 4

When contractual claims are defaulted due to the failure of a project to be completed and delivered, the client firm may have some legal claim to cost recovery or punitive damages.

Question 5

Ex-gratia claims

Answer 5

These are claims that a client can make when there is no contractual basis for the claim but when the client thinks the project organization has a moral or commercial obligation to compensate it for some unexpected event (such as premature termination).

Question 6

Lessons learned

Answer 6

critical review of the project—its high and low points, unanticipated difficulties, and elements that provide suggestions for future projects.

Question 7

Natural termination

Answer 7

the project has achieved its goals and is moving toward its logical conclusion

Question 8

(PFIs) Private Finance Initiatives

Answer 8

These areused (in the UK) to protect the excessive financial exposure of a contracting agency to a project being developed.

Question 9

Project termination

Answer 9

all activities consistent with closing out the project. It is a process that provides for acceptance of the project by the project’s sponsor, completion of various project records, final revision and issue of documentation to reflect its final condition, and the retention of essential project documentation.

Question 10

Termination by addition

Answer 10

This approach concludes a project by institutionalizing it as a formal part of the parent organization.

Question 11

Termination by extinction

Answer 11

This process occurs when the project is stopped due to either a successful or an unsuccessful conclusion.

Question 12

Termination by Integration

Answer 12

In successful projects, the project’s resources, including the project team, are reintegrated within the organization’s existing structure following the conclusion of the project.

Question 13

Termination by starvation

Answer 13

Many reasons: Political, Sponsors “pet projects”, General budget cuts. Best described as a willful form of neglect when the budget is slowly decreased to the point where the project cannot remain viable.

Question 14

Unnatural termination

Answer 14

a shift in political, economic, customer, or technological conditions has rendered the project without purpose.