New Jersey Institute of Technology

Department of Mechanical and Industrial Engineering

Name: Carlos Vanegas Date: 01/28/2020

Course: Engineering Management IE492-452

Assignment: Week 2
1. What is a Project Charter and why is it important?
A Project Charter, sometimes called Project Initiation or Authorization, is a
document where a previously selected project is formally authorized. In this
document, the sponsor or the client approves the realization and specifies the funding
for the project. It is important since it summarizes the most important parameters. It
also details a first and base plan for performing the project.

2. To answer the following questions, perform a search for “Request for

Proposals” and find an RFP that has been posted on the internet.
a. Which company developed the RFP?
McHenry County College
8900 US Highway 14
Crystal Lake, IL 60012

b. What is the company looking to accomplish?

The Company (in this case, the county college) requests proposals from
companies to provide Landscape Maintenance Services, including turf, trees and
shrub maintenance, irrigation services, ground covers and color maintenance.

c. What items are missing from the RFP?

After a quick review of the 24-pages RFP from McHenry County College, I can
assure none of the items cited in the slides nor the book are missing. The RFP
defines exactly what is needed from the contractor, defines all the agreements
well defined in four parts; Instructions to the Bidders, General Conditions,
Landscape Services, Miscellaneous provisions and finally, the company even
 defines the forms to be submitted in order to qualified and be considered by the
Board. The link to the RFP is listed below.
RFP:https://www.mchenry.edu/bid/upfiles/RFP03152012%20Landscape
%20Maintenance%20Service.pdf

3. List different types of contracts and their significance. Provide examples of

projects that fit into each contract type and explain.
There are two types of contracts:
 Fixed-Price Contracts: In this type of contract, the customer and the contractor agree
on a price which will remain fixed during the proposed work. This contract provides
low risks for the customer, who will not pay more than the price in the contract, but it
is a high-risk contract for the contractor since the cost of completing the project may
be higher than the originally planned. This type of contract is more appropriate for
projects involving low risks such as small constructions contracts, or marketing
contracts, where the customer defines every aspect of the final product.

 Cost-Reimbursement Contracts: In this contract, the customer agrees on paying the

contractor for all actual costs, regardless of amount, plus some agreed profit. Unlike
Fixed-price contracts, this type of contract is high risk for the customer since the
contractor can overrun the proposed initial price. However, the contractor’s
reputation will be involved if the price overruns the original proposed, this will
significantly reduce chances to get new contracts in the future. High-risk contracts
are the most appropriate for this type of contract such as technology development,
high-level constructions, environmental contracts, etc.

4. Were you involved in any project? What type of project was it? Was there an
RFP issued? What type of contract was it?
Unfortunately, I haven't been involved in any projects of this level. But in my
work (I used to work in a big pharmacy with compound laboratories). I was present
when the administrators were looking for a company to advise them on
biotechnology and medical instrumentation. No RFP was issued as they only had two
options that had been contacted after an announcement made on the internet. Finally,
a four-person company won the contract, but I did not know what kind of contract
they signed.
Bibliography
 Gido, Jack, et al. Successful Project Management. Cengage Learning, 2018.