The Risks of At-Risk Work

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The contracts are “almost” in place and the funding is “almost” approved. The vendor asks if they can “work a couple of hours towards the project ” until the contracts are “finalized”. What should you do? A few hours won’t be that bad, right?

Wrong. Immediately turn down the vendor’s offer to work at-risk.

When at-risk work comes into play, it’s tempting to bite into that apple. But, let me tell you from experience, that apple is a poisonous one. If the contract falls apart or the funding disappears, you may be on the hook to pay the vendor for the at-risk work they performed.

On the other side of that coin, I’ve seen project managers engage in the practice of asking vendors to work at-risk while the “contracts are being worked out”.  This is a practice that I don’t agree with, as it puts the vendor in a very difficult position.

In the end, buyers and sellers have to work together towards a common goal. Don’t put yourself or your vendors in a bad position that you’ll regret later on.

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2 thoughts on “The Risks of At-Risk Work

  1. This is such a common practice–and so potentially damaging! PMs and contract managers who allow work to begin before agreements are executed will establish a bad precedent. This move may even be a tactic employed by the vendor to test boundaries early in the engagement.

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