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Contract Management and Contract Changes
Introduction
Project changes present new challenges for the leaders and the team. One of the notable
concerns is the need to adjust some functions to align with an initial fixed price. The contractor
experiences financing problems that could undermine the quality of the output. The solution is to
look for additional capital in addition to the borrowed fund. However, such a move exposes the
project to the risks of losses. Martanti and Hardjomuljadi provide insights into the implications
of contract changes in government projects. They attribute project changes to misunderstandings
among stakeholders at the planning and implementation stages. Such issues interfere with the
cost, quality and schedule of the project.
Contract management involves the responsibilities assumed with the hope of delivering
output within the anticipated time and costs. Competent managers understand their obligations
and accurately lead the team to achieve their desired goals. A project leader identifies the various
means of maximizing operational and financial success while lowering financial risks(Martanti
and Hardjomuljadi 666). The dynamic project scenarios require managers to be flexible and
receptive to changes during the planning or implementation stages. However, running a project
under a fixed price is challenging for managers. The cost is not subject to adjustments, thus
increasing risks in the event of suggested changes by the owner. The project leader should
remind the owner that a change is out of scope and that the modifications could affect the
delivery of the anticipated outcomes. In this case, the success of a fixed price project takes more
effort to enable the team to avoid additional expenses.
A change mostly entails additional requests that require the contractor to reduce some
tasks in line with a fixed price. The adjustments cause financing challenges that could lead to
reduced profits in the long-term. A construction contract is different from other types since a
contractor pledges a non-existent item, and the process is prone to changes from time to time.
The variation during the implementation has cost and time implications due to the additional
work required to deliver the desired outcomes. The constructor has to deviate from the planned
value that describes the initial activities based on the budget plan. In other words, the team has to
adjust the proportions of costs in the intended periods. The earned value also changes due to the
completion of the activities outside the intended schedule (Martanti and Hardjomuljadi 668).
Thus, the project owner and the constructor should clarify the scope and volume of the task to
avoid disputes. The effect of a change manifests through additional expenses incurred for further
work. Correspondingly, an increase in the scope of a project means that the constructor requires
extra time or could decide to reduce the amount of work to deliver the output as within schedule.
The authors indicate that changing the scope of a project increases operating costs,
prolongs the duration of activities, and causes delays in payments. At the same time, the changes
arise from the client's new demand, adjustments in specifications, and planning requirements that

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contradict the initial agreement. Additional causes of alterations include the need to accelerate
the implementation or to introduce new methods. However, disputes and cost overruns are likely
to accompany new demands due to the delays, weak negotiations and approvals required before
proceeding to effect the changes. The situation worsens where recommended changes lower the
team's morale and cause decreased productivity. In this context, the leaders need to clarify the
need for adjustments to the scope and encourage the staff to commit themselves towards
achieving desired goals. The use of a case study for the methodology increases the likelihood of
understanding the implications of changes from a practical perspective (Martanti and
Hardjomuljadi 667). In this case, one familiarizes with the current issues in particular projects
and the measures adopted to prevent adverse outcomes. In other words, complementing the case
study with field surveys makes the findings reliable. Thus, the audience understands issues that
occurred at different stages and the solutions required to achieve operational excellence.
The problems associated with changes in a fixed price project indicate the need for
leaders to employ a rigorous and comprehensive approach that minimizes the need for
adjustments. The manager should collaborate with the client to develop the scope and clarify
deliverables. In this regard, the parties strive to ensure that the intended goals are specific and
realistic. Ideally, making vague assumptions or scope increases the risk of changes during the
planning and implementation phases. A sound work breakdown structure is also necessary to
ensure that the client understands the totality of the work required to deliver successful
outcomes. Smaller and manageable tasks are crucial since they enhance responsiveness to
changes and reduce the need for additional expenses to complete deliverables. The division of
functions also improves the management of scope such that work performed is within the initial
plan's requirements or the changes ordered by the client. It is also appropriate for managers to
ensure that their teams have the knowledge and skills required to deliver the deliverables within
the stipulated time. Failure to train the staff increases the risk of slow response to changes
requested by the owner. The absence of effective education programs for teams also limits their
ability to communicate appropriately and support the need for regular assessments. On the other
hand, having a competent workforce enables the organization to adhere to the client's
expectations and avoid scenarios that could prompt a demand for changes.
Conclusion
The case study of changes involving a government project in Indonesia reveals the
challenges contractors face as they strive to deliver the anticipated quality. In this case,
adjustments to the scope require additional financial support. In some cases, the contractor has to
add their capital, thus exposing them to decreased profits in the long term. Cost overruns are
common due to delayed formalization of the change, which forces the contractor to adjust the
activities in line with the initial timeline. The article indicates the need for an accurate and
adequate scope to ensure all parties understand the implications of changes. In this case, the
project managers engage the client in describing a task and deliverables. The project leader and
their teams then assume the responsibility of examining the budgets and the expected outputs to
meet clients' needs and expectations. The manager should define and manage the scope hence the
need to engage in extensive deliberations to minimize ambiguities. Therefore, it pays off when
the manager and teams have clear information on the deliverables. The accurate and adequate
information about the scope reduces the likelihood of rework, thereby saving the contractor from
the risks of reduced profits.

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Surname 1 Student’s Name Professor’s Name Course Title Date Contract Management and Contract Changes Introduction Project changes present new challenges for the leaders and the team. One of the notable concerns is the need to adjust some functions to align with an initial fixed price. The contractor experiences financing problems that could undermine the quality of the output. The solution is to look for additional capital in addition to the borrowed fund. However, such a move exposes the project to the risks of losses. Martanti and Hardjomuljadi provide insights into the implications of contract changes in government projects. They attribute project changes to misunderstandings among stakeholders at the planning and implementation stages. Such issues interfere with the cost, quality and schedule of the project. Contract management involves the responsibilities assumed with the hope ...
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