Methods for Ending a Contract or a Project

To simplify the coverage of this process, I have assumed that our project completed as planned, and that any contracts involved also ended at the same time the project completed. In reality, many of these "ending a project" steps could and should be done at the end of each project phase and not just the end of the project. These are part of the closing project management process described the PMI PMBOK.

Contract duration does not always equal project duration.

Also, there are other scenarios that can occur to either your project or contractual relationships, and we will quickly review these next. In each of these cases, you should review the End Project Checklist to see how many of these you can perform.

Terminating a Contract

In many cases, the duration of your contract will be shorter than the duration of the project, especially if you have only outsourced a specific phase or a portion of the project work. In these cases, your work to bring closure to the contract and vendor relationship will be separate from the steps to end the project.

In other cases, the contract may end early because of mutual agreement between the parties or because of a breach of the contract terms. To clarify, a contract can end in one of three ways:

• Successful performance
• Mutual agreement
• Breach

Successful performance is what we think of as "getting the work done." All the work specified in the contract was performed by the seller and formally accepted by the buyer. The term contract termination refers to the other two ways a contract can end: mutual agreement and breach.

If there is mutual agreement, the contract is terminated because both the buyer and seller involved in the project agree that the project work should not continue. However, if a project contract is terminated due to breach, a party involved in the project work has failed to obey its side of the contract.

Terminating a Project

In the preceding section, we reviewed how a contract can be completed or terminated, and we mentioned that a contract closeout will not always signify the end of a project. However, the end of a project will almost always force a related contract to end. For your reference, Table 22.1 lists the various ways a project can be terminatedall of these would trigger some or all aspects of our End Project Checklist.

Table 22.1. Methods of Project Termination

Method	Description
Completion	Successful performance; getting the work done.
Cancelled	Portfolio management decision due to either poor performance, better resource utilization, or re-alignment with organizational goals.
Displacement	Project becomes obsolete due to another project.
Collapse	Project ends due to external factors, such as natural disasters, corporate mergers, and so on.
Absorption	The project becomes a permanent part of the sponsoring organization (a new department or division).
Deterioration	A "slow death." Neglect. The sponsoring organization gradually reduces its support and budget for the project.

The Absolute Minimum

At this point, you should have a solid understanding of the following:

• Many of the steps involved with ending a project may need to be performed at the end of each project phase.
• Client acceptance of project deliverables should be formal and documented.
• Ensure that the transition plan of project deliverables is performed.
• Capture lessons from the project (both positive and negative) to help the organization in the future.
• Take care of your project team membersgive them official performance feedback, offer to serve as a reference (if appropriate), and help them transition to their next assignment.
• Archive all project management items and all project deliverables (if permitted) to your organization's knowledge management system for future use and reference.
• Ensure that contractual obligations have been met and that all contracts are finalized properly.
• Tie up the financials, including final transactions, reports, and closing of associated charge and accounting codes.
• Capture and market the accomplishments of the project.
• Make sure to celebrate and recognize the achievements of the project.
• Another good source of project management information and articles can be found at http://www.niwotridge.com/.

The map in Figure 22.1 summarizes the main points we reviewed in this chapter.

Figure 22.1. Overview of ending a project.