Charging Client for Delayed Take Over

Charging Client for Delayed Take Over

In most project definition document, project scope, budget, timeline are normally clearly documented.

Scope will be drafted to indicate what is the agreed deliverables to be produced.
Budget will be computed to the resources’ time effort and materials required.
Timeline will be calculated based on the resources’ required effort.

As for timeline, it is normally the case that the measurement is always on the project team. Meaning there will be penalty or additional charges for project team to pay if they are late in the delivery.

On the other hand, have you experience that the project cannot go-live or closed because the client fail to take over the project. The client makes the project to go-live later than expected scheduled date.

In a typical contract, it is always the project team that pays for the penalty. The client is always the party that wants the project to be delivered the soonest.
There is seldom a chance that the client fail to accept the deliverable. The client would want it as soon as possible.

In one of the projects I managed, my project deliverable project output is client’s input to their internal system.

I had proposed a project timeline that required 4 man-months to complete. The client wanted it quick and wanted to be 3.5 months.

After some crashing and multi-tasking of certain tasks, I managed to complete the project in 3.5 months.
During the course of my project delivery, I sensed that the client’s system internally is having some integration issue. However, there wasn’t my scope thus I ignored.

After the 3rd week, I requested the client to start test my deliverable. Unfortunately, due to client’s internal integration system, the client delays the testing thus causing my project cannot proceed to close.

Client’s system is not ready to absorb my project output for their internal system.

In the contract, I did not state there will be penalty to clients if they fail or drags my projected schedule. This scenario was seldom happened

After most works had been developed, the client still extending my testing and the closure schedule.
Drafted a few change request to move the timeline. Unfortunately, it seems not right if there are few more change request of such nature.

Thus in my last change request, I included a charging table. The table states the project daily charge rate for any delay. The client was not happy to see such table.

The client refuses to accept and approves the last change request. The client states that there is no clause in the contract that the project team can charge the customer against late start date. The client only has the rights to charge the project team for late delivery.

This caught my team by surprise.
The team is not funded for any client’s delay.

Lesson Learned: both project team and the client should have a clause in the contract prior work start. Indicating that there will be penalty charges on either party, should there be any team that not able to meet the projected timeline.

Meaning if the project team will pay penalty if they fail to deliver on time. There is also a penalty for the client to pay if the latter fails to take the project deliverable in accordance to the project team’s scheduled closure.

If the client got a leeway, that means, the project team cannot charge the client for any time lost. This will eats up the project team resources and effort. This clause will also protect the project team for completing the delivery early but not able to close the project.

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