ABSTRACT
The commercial management of a project is an enormously important part of the project. On small projects the project manager will probably manage the commercial aspects himself. However, on large projects the project manager will probably have a planner, commercial manager, risk manager and other specialists to support them. Some of the work areas which may fall within the remit of the project commercial manager are:
Estimating – producing cost estimates for project work or of changes to the work scope. Grant application – if the project is eligible for government grant funding. Procurement – managing the process of procuring suppliers, consultants and contractors. Insurance – making sure that the project and all suppliers carry appropriate insurance cover. Budgeting – transforming estimates and/or contract sums into a budget and ensuring that each member of the project team knows what they have got to deliver for how much money. Contingency management – establishing a contingency between budget and the funding available such that money is available to pay for unexpected expenditure. Monitoring and managing the expenditure of contingency. Cost control – keeping accounts for the project and tracking what has been spent against what should have been spent. Change control – ensuring that the cost effect of changes to the project are identified and agreed. Although change control is part of commercial management it is also closely bound up with controlling the project scope. Consequently I am giving it a chapter to itself (Chapter 18) and just flagging it up here as an important commercial management function. Payments – agreeing valuations of work done by suppliers, contractors and consultants, receiving their invoices and ensuring that they are paid.
