Reference no: EM133640906

Assignment: The Executive Director

Background

Richard Damian was delighted that his political party had won the election. As a reward for his years of support, he was appointed executive director of this government agency, replacing a person from the other political party. Damian had been with the government for more than 30 years. This would be at least a four-year appointment, and, if his party was still in power after the elections four years from now, he could be the executive director for an additional four years or more.

Damian knew how to play political gamesmanship. He avoided anything that was considered controversial and voted with his party line on all issues even if he disagreed with his party's position. He knew how to get things done behind the scenes and without exposing himself to any risks or being scrutinized by the media. But now, as executive director, he realized that things might be different. He was now exposed to the media.

The Internet Security Project

Damian's predecessor had been plagued by Internet hackers who were getting access to some of the agency's proprietary information. The media was aware of this, and his predecessor had been engulfed with bad publicity. The media kept asking what Damian was planning to do to correct the situation, and Damian kept stating that he was not ready to discuss this until he had worked out a plan with his executive staff.

Damian's predecessor had tried unsuccessfully to correct the problems using the agency's internal information technology (IT) resources. Unfortunately, the internal resources had limited IT security knowledge. Budgetary cuts made it impossible to hire additional IT resources. Government hiring and firing practices also made it difficult to remove some poor performers and replace them with other workers trained in IT security practices. Damian's predecessor also tried to get support from other government agencies, but they had their own political agendas and could not or would not provide the needed support.

The project had to be outsourced. Damian instructed one of his direct reportees to assign someone as the project manager and begin by soliciting bids from at least three vendors. Since time was critical because of the pressure imposed by the media, Damian recommended that the quotes be obtained informally because of the time-consuming, rigid policies and procedures that must be followed for traditional government contracting.

Assigning the Project Manager

The person assigned as the project manager reported several levels below Damian. The project manager had been with the agency for less than two years and had a degree in information systems. In addition, the project manager, and the rest of the agency's IT group, had very little knowledge about IT security. The agency would have to rely on the expertise of contractors.

Damian believed that rank has its privilege. As such, he decided that he should not have to interface directly with people who report low on the organizational chart. He instructed one of his direct reportees to keep him informed about the status of the project.

A month later, Damian was informed that there were three qualified bidders. The bids ranged from $1.5 million to $1.75 million with a time frame of approximately three months. All three bidders said that their bid was just a rough estimate and that a final bid could not be made without a clear examination of the agency's existing hardware and software. Furthermore, all three bidders stated that they wanted a cost-reimbursable contract rather than a firm-fixed-price contract.

Damian was in a hurry to get the contract started. He instructed the procurement people to issue a cost-reimbursable contract to one of the vendors immediately. This required violation of traditional procurement policies and procedures, but Damian felt that this was an extraordinary situation that needed resolution quickly. Two weeks later, the contract was signed and the project had a go-ahead date of March 1.

The Work Begins

As soon as the work began, Damian held a news conference and announced that the security system was being modified and that all protocols for the new system would be operational within 90 days, the duration of the contract. Even though he had very limited knowledge about how the system would work, he still made promises concerning the system's capabilities. The media seemed somewhat skeptical about how quickly the changes would be made and Damian's promises and began asking questions. Damian knew how to play the political game. He certainly did not have enough information to answer the questions that might be forthcoming. He declined to answer any of the media's questions, stating that all questions would be answered at a future new conference.

Over the next month, the media kept asking why Damian's agency was not providing any information on the status of the new security system. It was rumored that the project would be coming in late and over budget. Damian was several layers of management removed from where the work was taking place and knew very little about the progress of the project'. Information on the status of the project, especially any bad news, was being filtered out as the information flowed up the organizational hierarchy to the point where it appeared that there were no issues. Unfortunately, that was not the case.

Damian learned that the project would be at least one month late and possibly over budget by $500,000. He called a news conference and informed the media about the schedule slippage and cost overrun. Trying to protect his image, Damian stated that he was never informed about the risks on the project. Furthermore, he said that he was forming a committee headed by one of his direct reportees to get to the bottom of the problem. Once again, Damian refused to answer any questions posed by the media.

The Problems Mount

Damian asked his direct reportee for a briefing on what was being done to correct the situation. The information provided by the contractor stated that his agency's hardware and existing software were outdated and needed to be replaced. The software and changes needed to enhance computer security could not run on the existing hardware. The contractors was now asking for an additional $4 million to update all of the hardware and software. The agency's IT personnel were all in favor of the upgrade. The entire changeover would add six months to the length of the schedule.

The $1.75 million project was now at $6 million and possibly increasing. Damian was convinced that the media would attack his credibility because of the security issues that still existed. Someone had to be blamed so that the "heat" would not be placed on Damian. His first thought was to blame the project manager, but everyone would know that this was not the case.

Playing the political game, Damian called another news conference and blamed his predecessor for all of the existing issues. He stated that these problems should have been addressed years ago and that his predecessor, who belonged to a different political party, failed to take the necessary steps to correct the situation. Furthermore, Damian asserted that one of his direct reportees was now the sponsor for the entire project and that Damian would receive weekly progress briefings.

Damian played the political game to the best of his ability. Not only did he blame the other political party and his predecessor for all of the problems, but he insulated himself from further disasters by stating that one of his direct reportees was now the sponsor. Damian now believed that he would be free from further criticism.

The Situation Worsens

Damian's agency did not have authorization for purchasing computer hardware and software without getting permission from the government's centralized procurement group. The hardware and software recommendations from Damian's contractor were not on the government's approved hardware and software list. The contractor either had to select hardware and software from the approved list or apply for add-ons to the list. Applying for add-ons to the approved list could take as much as three to six months, thus lengthening the existing contract.

The contractor reviewed the list and recommended purchasing hardware and software that would increase the project's cost by $5 million rather than $4 million. The length of the project was now estimated to be 1.5 years rather than three months-assuming, of course, that the hardware could be received within a reasonable amount of time. Trying to get additional hardware and software added to the approved list could have possibly saved $1 million but might have lengthened the project to two years.

The media became aware of the situation and began attacking Damian's credibility as an executive director. Once again Damian had to play the political game. He called a news conference and stated that, although time and cost were both constraints, time was prioritized as being more important than cost. Therefore, he accepted the cost overrun of $5 million. Furthermore, Damian stated that he would now be the sponsor for this project, although executive directors normally do not sponsor projects of this size.

Damian once again blamed his predecessor for all of the problems, stating that this problem could have been done years ago at a lower cost. He also left the media with the impression that his direct reportee who was previously the sponsor was being reassigned to another position. That move made it appear that his report was partially at fault.

The Project Approaches Completion

The original project, with a budget of $1.75 million and a duration of three months, was completed at the end of 2.5 years and at a cost of $9 million. Software bugs were found during testing that required overtime, software changes, and the purchase of some additional hardware.

Once again Damian played the political game. He informed the media that the project was completed and that security was now in place. Furthermore, he stated that he personally was in charge of the project all the way and took full credit for its successful completion.

Task

Question A. Could the solution to the security problem have been managed internally, or was it necessary to outsource the work?

Question B. Because of the sensitivity of the problem, was it acceptable to get quotes from vendors on an informal basis, or should everything have been done through the formal channels for procurement?

Question C. Why did Damian want someone quite low in the organizational hierarchy to function as the project manager?

Question D. Why did Damian want one of his direct reportees to keep him informed about the status of the project rather than hearing it directly from the project manager?

Question E. Why did all three bidders want a cost-reimbursable contract rather than a fixed-price contract?

Question F. Why was Damian reluctant to address the media and answer their questions once the project started?

Question G. What was the driving force behind Damian's actions throughout the case?

Reference: Kerzner. H. (2017). Project Management Case Studies, 5th ed. Wiley and Sons.