One response I have observed seemed to preclude a constructive resolution. There was a dawning awareness by both client and vendor that they had significantly underestimated project scope. Vendor progress against the unrealistic expectations was faltering. The client and his legal team dictated a remediation plan to get the project back on track to meet the contractual commitment. The plan proposed a series of impossible milestones to gauge vendor success in fixing the problem. Pretending that the originally contracted goals were achievable wasn’t helpful. Things quickly escalated to a legal fight. There were casualties on all sides, and the project didn’t get done any better, faster, or cheaper.
A more effective approach is to ask the vendor to develop and propose a remediation plan—a short-range plan to complete near-term deliverables (giving you a clearer path to graceful termination) that includes measurable criteria to build confidence in their progress—while they develop a revised plan for the balance of the work. The intention here is not to prematurely consent to change the contracted agreement (that may come), but to give the vendor some breathing room and a chance to be forthcoming during planning about its efforts to reassess the situation.
Jointly discussing options during replanning allows “hypothetical” changes to project scope, schedule, or budget to be discussed so that all parties can signal what is and isn’t feasible. This won’t magically solve the problem. But, if the plan is a collaborative effort, the vendor team is competent, and the vendor hasn’t gone over to the dark side, it may be easier to find a negotiated settlement of the difference between the original contract and the new proposal.
When problems materialize, there is a delicate balance between protecting your organization’s legal rights and provoking a messy legal battle. Lawyers are the best people to advise you in this high-stakes game, but you must consider the consequences of their advice to assure they are consistent with the end game that supports your goals.
If your vendor has gone over to the dark side and is preparing for a legal blame game, there may be no way to salvage the relationship. On the other hand, if the person across the table has seemed reasonable until recently, a collaborative approach to planning your way out of the contractual quagmire may give you the best opportunity to salvage the situation.