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September 2021

Week 6: Scenario Activity

TABLE OF CONTENTS

Scenario Summary

Introduction

You are a Project Manager for a small private but growing company that specializes in the manufacturing of military electronics named Integrated Systems Design (ISD). You have been tasked with putting together a contract for a recent award for the government for your company’s newest technology. Your company’s technology, called Independent Operation (IO) offers limited artificial intelligence capabilities to allow drones to operate independently. The new computer brain that your company has developed will allow drones (or other equipment) to operate without the need to remain in contact to avoid being disrupted in the field. The company, Integrated Systems Design, realizes that their technology is new, but it will likely be copied by others who are attempting to accomplish the same.

Company Details

The company is called Integrated Systems Design (ISD) and they have been producing military grade electronics and guidance systems for about 6 years and have grown to have 5 million dollars in sales this year. They specialize in high end, highly reliable and cutting edge type items. They have been primarily doing business with the US Military and Department of Defense.

The company is based in Los Angeles. The Los Angeles office handles sales, distribution as well as customer service. The Los Angeles facility houses manufacturing, research and development, marketing, supply chain, distribution, and reverse logistics. All manufacturing is done in the US, but some components are purchased overseas. The total number of employees is 20.

Since the company understands that others will try to copy their technology, the company has been firm about making sure that all people involved have signed nondisclosure documents and that all material supplied is always marked confidential.

Current Situation

ISD has just been awarded the largest contract ever for the company as the government seeks to corner the market by contracting for the exclusive use of the Independent Operation (IO) technology. The government wants exclusive use of the technology and in turn the government will agree to protect the technology and treat it as a national security secret to avoid having information disclosed about the project. Although the contract will be for 30 million dollars over the next five years, there are those that are concerned that this might limit the company’s growth potential.

Your Task

The President of the company has asked you to discuss with the key players to find out their position about moving forward with the contract, to put together a pros and cons list, and to put together details about the essential elements of the contract that need to be included.

Your Role

As the project manager, you have been tasked with gathering feedback from different parties and to put together a go forward plan.  Below is a summary of some of the important comments from your individual meetings with these individuals.

Key Players

Click the left or right arrows to view the key players.

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Phil, ISD Vice President, Operations

“I think that this government award is great, but I worry if we will be able to supply everything they requested.  I want it to happen, but all the problems land on my desk and if we cannot produce, the government will cancel the contract.  I’m not saying that we can’t do it, but one cannot just double production overnight.

Our operational footprint is still quite small and expansion will be tough.  Also, lets not forget the government wants everything delivered in Virginia and we are based in Los Angeles.  Its not just a walk down the road and now we will be moving our proprietary technology that we will have to protect in transit.  It just is a very complex situation that will take planning and coordination so we need to be careful about how the contract is written.  I know that the government wants everything tomorrow, but we need to be smart about how we expand.  We don’t want to be in a situation where we over promise and under deliver, because then the government will have a reason to cancel the contract.  If the government cancelled the contract, we will own a lot of stock and have no sales.”

Iris, ISD President and CEO

“The government contract will ensure the future of the company.  It will double our revenue and we will be able to do so much more in the future. I know that there are some concerns that we could do more if we sold this technology to others, but my biggest worry is that if this technology ended up in the wrong hands, they would be able to reverse engineer it and we might not be able to compete.  Having a solid contract with the government with a steady cash flow will give us a solid base as well as to help protect our interests for the next five years.”

Tony, ISD Vice President, Sales & Marketing

“I like the idea of working with the government, but this is really going to hurt our sales.  I have been working with clients to have them buy into our IO technology so it will be a big disappointment if I have to go back to them and tell them I can’t sell it to them.  I am sure that I could bring in millions of dollars in sales just from the clients I have been telling them about this technology.  I know the government wants it for drones, but I think that the application of this technology could have a much broader appeal.”

Phil, ISD Vice President, Operations

“I think that this government award is great, but I worry if we will be able to supply everything they requested.  I want it to happen, but all the problems land on my desk and if we cannot produce, the government will cancel the contract.  I’m not saying that we can’t do it, but one cannot just double production overnight.

Our operational footprint is still quite small and expansion will be tough.  Also, lets not forget the government wants everything delivered in Virginia and we are based in Los Angeles.  Its not just a walk down the road and now we will be moving our proprietary technology that we will have to protect in transit.  It just is a very complex situation that will take planning and coordination so we need to be careful about how the contract is written.  I know that the government wants everything tomorrow, but we need to be smart about how we expand.  We don’t want to be in a situation where we over promise and under deliver, because then the government will have a reason to cancel the contract.  If the government cancelled the contract, we will own a lot of stock and have no sales.”

Iris, ISD President and CEO

“The government contract will ensure the future of the company.  It will double our revenue and we will be able to do so much more in the future. I know that there are some concerns that we could do more if we sold this technology to others, but my biggest worry is that if this technology ended up in the wrong hands, they would be able to reverse engineer it and we might not be able to compete.  Having a solid contract with the government with a steady cash flow will give us a solid base as well as to help protect our interests for the next five years.”

Next

Assignment

Deliverable: Turn in a three- to five-page paper outlining your complete responses to the above questions.

  1. Write one page about if the company should or should not move forward with the contract. Base this upon the facts, the comments from the key players and other supporting research (Note: Review Chapter 9 of the Procurement Project Management Success: Achieving a Higher Level of Effectiveness book). Justify your decision and explain your position.
  2. Put together a pros and cons listing and score each pro and con (You can just list them in order of importance). Remember to define and explain each pro and con in detail.
  3. Identify the required elements that should be included in this important contract. Justify each required element.
  4. As part of the award, the government has requested that your company attend a debrief meeting. What will you disclose and what will you not disclose at this meeting?

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