The Roman Approach to Contract Risk Management

An interesting paper in the September edition of the Project Management Journal co-authored by a colleague, Derek Walker contrasts the delivery of public projects in the Roman era with modern project management. The primary conclusion is that nothing much has changed; the Romans outsourced most of their major works to contractors, with both public accountability and a legal framework as key governance constraints.

What’s significantly different, is the consequences of failure! If a project went badly wrong in Roman times, the responsible public official would suffer a major career limiting event that could affect the prospects of his descendants for generations to come. Whilst the retribution applied to the contractor could be even more serious including death as well as retribution for generations to come.

Applying the Roman approach could give a whole new meaning to the ‘pain share’ bit of an Alliance contract…… as well as removing by execution many of the worst performing contractors. Rome was not built in a day but their empire did last for close to 1000 years.

This history contrasts with several recent studies that clearly demonstrate the ineffectiveness of penalty clauses as a mechanism for managing client risk two relevant papers are:
CIOB; Managing the Risk of Delayed Completion in the 21st Century
Blake Dawson; Scope of Improvement

It would seem the sanctions offered under today’s laws are insufficient to make penalties really effective (and in modern contracts they only work one way rather than the two-way effect of the Roman sanctions). Therefore the only option is proactive management.

The unacceptable alternative is to hope the problem goes away…… but burying your head in the sand leaves a very tempting target for someone’s boot.

If you are interested in the history of project management, my papers offer a good starting point, starting with The Origins of Modern Project Management at: http://www.mosaicprojects.com.au/Resources_Papers_050.html

For more in-depth coverage see: http://www.lessons-from-history.com and of course: Frontinus – A Project Manager from the Roman Empire Era by Walker & Dart (Project Management Journal Vol.42, No.5, 4-16)