CHAPTER ONE

OVERVIEW OF PROJECT CONCEPTS

1.1. PROJECT - DEFINITIONS AND DESCRIPTIONS

1. The dictionary meaning of a project is speculative imagination; a scheme of something to be

done; a proposal for an undertaking. In this literal meaning, two important aspects have to be
borne in mind, namely; a scheme and speculative imagination. In other words, innovation and
vision form an integral aspect of a project programme. Among other things, these are also
interrelated with the basic characteristics of an entrepreneur.
2. A unique set of coordinated activities, with definite starting and finishing points, undertaken by
an individual or organization to meet specific objectives within defined schedule, cost, and
performance parameters.
3. The basic characteristic of a capital expenditure (capital investment or capital project or simply a
project) is that it typically involves an outlay (or current and future outlay) of funds in the
expectation of a stream of benefits far into future.
4. Several economists and bankers have defined a project in different ways. However, a simple,
precise definition is not easy to give, nor is it necessary. The following are among the definitions
given by the different parties:
 The ECAFE Report by a group of experts has defined it as "the smallest unit of investment
activity to be considered in the case of programming".
 The World Bank has defined project as an approval for a capital investment to develop
facilities to provide goods and services."
 Little and Mirless define a project to any scheme or a part of a scheme for investing
resources which can be reasonably analyzed and evaluated as an independent unit. It can
be any item of investment activity that can be separately evaluated. That is, a project is an
appraisal for investment with the definite aim of producing a flow of output over a
specific period of time.
 Gittinger has defined it as the whole complex of activities involved in using resources to
gain benefits. Generally, in agricultural projects, we think of an investment activity where
we expend resources to create a producing asset from which we expect to realize benefits
over extended period of time.

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  Dr. Albert O. Hickman has said that the development project connotes purposefulness, some
minimum size, a specific location, the introduction of something qualitatively new, & the
expectation that a sequence of further development moves will be set in motion. These
projects are privileged particle of the development process.

In general, a project definition might thus go something like this:

A project is a set of proposals for the investment of resources into clearly identified set of actions
(frequently in the public sector) that are expected to produce future benefits of a specific kind. The
whole series of actions being the subject of individual planning and examination before being adapted
and implemented within a single overall financial and managerial framework.
It may also be defined as a scientifically evolved work plan devised to achieve a specific objective
within a specified period of time.

The three basic attributes in this definition are:

o A course of action;
o Specific objectives; and
o Definite time perspective.
Projects have their own size. A multi-purpose river valley project is in a sense a gigantic scheme.
There are also small projects, which call for investments and analysis. A project has specific objectives
in terms of geographic location, specific starting, and end point, and most importantly to serve a target
population by achieving good investment returns. In addition, it has also an organization to implement

1.1.2. CHARACTERISTICS OF A PROJECT

Though various connotations are given to the concept of a project, they have the following basic
characteristics:
1. Investment Pattern: Projects involve the commitment of scarce resources to a specific line of
action, which prevents the use of those resources elsewhere. These resources include not only
financial capital, but also, more importantly, raw materials, the product of manufacturing and
services capacity elsewhere in the economy, labor of various kinds, managers and organizers
and so on. Almost all of these are certain to have alternative possible uses elsewhere. The
pattern of investment commitment in a project is usually for capital investments to be made to
establish productive capacity or physical works, which then have a long life of operation or
use.

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 2. Benefits or gains: Project resources are committed for a long period to produce benefits that
are usually quite clearly identifiable, but which may not occur or be clearly felt for several
years. Their effects are usually gradual and lasting, but involve waiting for results. This
waiting obviously has a cost.
3. Time limit: Projects have their own time perspectives, which set the period of time during
which the project development and project activities are undertaken. As a result, projects need
special arrangements and procedures for their planning, appraisal and so on because of the
shortage of resources usable for development, the large amount of resources that they can
absorb, and the need to wait for benefits.
4. Location: Besides to its sequence of investments, production and benefits, a projects normally
have specific geographic location or a rather clearly understood geographic area of focus.
Probably, there will be a specific clientele in the area (region) whom the project is intended to
reach and who’s traditional and social pattern the project will affect.
5. Focus: A project has fixed set of objectives/missions/goals. Once these objectives, goals or
mission have been achieved, the project will cease to exist or become extinct from the
organizational pyramid sooner they are met.
6. Life span: Project cannot continue infinitely; it is executed, terminated or dead. Every project
is invariably time bound. The time limits are well defined through schedules.
7. Single-time activity: /Unit of command/: No project is often repeated. Every project, may it be
simple or complex, small or big, industrial or commercial, government or private, is unique in
nature and may be vanquished or performed of its quality only at once. However similar the
projects may be, the activities and their comprehension in operations, scope, deliverable, etc
would indeed change from each other. Consequently, the entire responsibility of handling the
project will be entrusted to the single head (project manager) who will ultimately account for
the whole performance.
8. Uniqueness: Projects are as unique as fingerprints two individuals. No two projects are alike
in their execution even if the plans are duplicated. In other words, usually a project is a unique
activity noticeably different from proceeding similar investments, and it is likely to be different
from succeeding ones. The deployment and performance of the resources will vary which
convey conformance and confirm to unique standards and quality.

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 9. Team Sprit: Every project encourages a team spirit. This team consists of different individuals
from varied disciplines to bestow their knowledge, experience, and credence towards a total
performance.
10. Life-cycle: Like any other product, project will also be reflected and influenced by the life-
cycle phases and to which the success or failure in the project can be ascribed. Regularly, from
conception to the commissioning of the project. In reality, project has to run through some
phases that are intertwined with various stages.
11. Flexibility: Change and projects are synonymous. Always a project witnesses multiples of
modifications and changes in its original plans, programs and budgets. These constant drills
make the projects more dynamic and flexible. Another prominent reason why the projects are
more flexible is that the ideas in the conception stage are only half backed and as the ideas are
being prototyped the real dilemma gets penetrated and clarity makes project 'full-backed' and
'crunchy nut'. Therefore, every project have a room for change and inherently flexible in the
early stages of its life cycle.
12. Abstract to Discerning: A project generally transmigrates through a process called 'blurred
and crystal-clear'. When the idea is conceived, it may be rich with sparsely 50-60%
information on SWOT analysis. As it moves further towards various analytical stages, the
more transparent or clear it gets to on the future prospects and goals.
13. Customer-specific: Projects are not ready-made rather they are made ready. A project will
have semblance only when there is a demand from a specific customer or group of customers
in the form of sponsors. Therefore, a project is always customer-specific and considers the
constraints on the demand side of economics more often than on the credits or supply side. The
conveniences of the supply side of economics such as labor availability or resources and
managerial talent, etc. are of secondary concern, primary being the 'customer-requirement'.
14. Complex web of things, people and environment: A project is not contingent to a single factor
related with the project. It is a mix of all the man-made and natural things, which form a
complex interrelationship between for a right cause. This unity of diversity is a global concept
for any project.
15. Subcontracting: Subcontracting is a subset of every project and without which no project can
be completed unless it is proprietary form or tiny in nature. Subcontracting is an inescapable
fact of project, to be dosage appropriately, with in time.

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 16. Individual Identity: Frequently projects involve special financial arrangements. In projects for
public sector, it includes loans from overseas, development banks and other agencies, or
donations. Because relatively few projects are financed simply from government allocations,
the financing for a project refers to closely defined actions. This financial definition tends to
give projects a clear boundary & individual identity. Thus, the planning, financing &
implementation is made as unit.
17. Risk and Uncertainty: This is a way of life of projects. Risk, uncertainty and projects are
positively correlated. A well-conceived project may have lesser degree of risk and uncertainty
whereas an ill-prepared project has higher degree of risk.
18. Size: Often projects form a clear and distinct portion of a larger, less precisely identified
program. The whole program might possibly be analyzed as a single project; but by and large,
it is better to keep projects rather small, close to the minimum size that is economically,
technically, and administratively feasible.
In short, a project is an economic activity with well-defined objectives and having a specific beginning
& ending point. It should be planned, financed & implemented as a unit where both costs & returns are
measurable. Thus, a project will have a well-defined sequence of investment & production activities &
a specific group of benefits that can be identified, quantified & determined.

A well-planned project includes a correct consideration of alternatives, identification of key issues,

board participation, compactness & enforceability. It should be neat, clear-cut, and, of course,
specific.

As it is stated above, from the point of view of resource allocation, a project can be considered as a
proposal involving capital investment of the purpose of developing facilities to provide goods and
services. The goods and services, which the project seeks to provide, differ widely. A project may
involve the establishment of a new plant for the manufacture of steel ingots, it may involve the
establishment of additional educational facilities to particular age group in the community, or it may
aim at developing infrastructure facilities for the marketing of agricultural commodities. Whatever be
the nature of the project, it will involve allocation and consumption of resources on one hand and
generation of resources, goods, or services on the other.
1.1.3. IMPORTANCE OF PROJECTS
A project is of great importance to entrepreneurs for setting up of new ventures and for their smooth
running on

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 an on-going basis without any hindrances. Generally, projects have the following dimensions
1. They become the catalytic agents of economic development
2. They initiate the process of development - production, employment, income generation and so on
3. They have consequences, which are long-term in nature.
4. Projects provide the framework of the future activities of the enterprise
5. They also shape the future pattern of services
6. They also initiate development of basic infrastructure and environment
7. Project identification brings the necessary changes in society in course of time.
8. Projects accelerate the process of socio-cultural development.
1.1.4. PROJECT STAKEHOLDERS
Stakeholders are the ones who have a share, or an interest in an enterprise. Stakeholders in a company
may include shareholders, directors, management, suppliers, government, employees, customers, and
the community. Stakeholders are influenced by the outcomes and objectives. They have varying level
of responsibility and authority. Thus, they should not be ignored. A project manager should try to
manage and fulfill the expectations of the stakeholders. There are both positive and negative
stakeholders. In some cases, stake holder’s roles and responsibilities are overlapping. For example, an
engineering firm also provides financing.

Project stakeholders are individuals and organizations that are actively involved in the project, or
whose interests may be affected as a result of project execution or project completion. They may also
exert influence over the project’s objectives and outcomes. The project management team must identify
the stakeholders, determine their requirements and expectations, and, to the extent possible, manage
their influence in relation to the requirements to ensure a successful project.

As already mentioned, stakeholders have varying levels of responsibility and authority when
participating on a project and these can change over the course of the project’s life cycle. Their
responsibility and authority range from occasional contributions in surveys and focus groups to full
project sponsorship, which includes providing financial and political support. Stakeholders who ignore
this responsibility can have a damaging impact on the project objectives. Likewise, project managers
who ignore stakeholders can expect a damaging impact on project outcomes.

Stakeholders may have a positive or negative influence on a project. Positive stakeholders are those
who would normally benefit from a successful outcome from the project, while negative stakeholders

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are those who see negative outcomes from the project’s success. For example, business leaders from a
community that will benefit from an industrial expansion project may be positive stakeholders because
they see economic benefit to the community from the project’s success. Conversely, environmental
groups could be negative stakeholders if they view the project as doing harm to the environment. In the
case of positive stakeholders, their interests are best served by helping the project succeed, for example,
helping the project obtains the needed permits to proceed. The negative stakeholders’ interests would
be better served by impeding the project’s progress by demanding more extensive environmental
reviews. Negative stakeholders are often overlooked by the project team at the risk of failing to bring
their projects to a successful end.

 Key Stakeholders:
Key stakeholders include the following:
 Project Manager:
The person, who is responsible for managing the project operation.
 Customers, End Users:
The person or organization that will use the project’s product. These may be multiple layers of
customers. For example, the customer for a new pharmaceutical product can include the doctors who
prescribe it, the patient who take it and the insurers who pay for it. In some application areas, customers
and user are synonymous, while in others, customer refers to the entity acquiring the project’s product
and users are those who will directly utilizes the project’s product.
 Performing Organization:
The enterprise whose employees are most directly involved in doing the work of the project.
 Project Management Working on the Project:
The members of the team who are directly involved in project management activities.
 Project Team Members:
The group that is performing the work of the project. It includes the members who are directly involved
in the project activities.
 Sponsors:
The person or group that provides financial resources, in cash, or kind, for the project.
 Influencers:

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People or groups that are not directly related to the acquisition or use of the project’s product, but due
to an individual’s position in the customer organization or performing organization, can influence,
positively or negatively, the course of the project.
 Project Management Organization:
If it exists in performing organization, the Project Management Organization can be a stakeholder if it
has direct responsibility for the outcomes of the project.
 Stakeholders are important to a project because:

 They can be critical in its success or failure ,

 They can have a much better understanding of the feasibility of different actions and the
resources required to reach certain objectives than an outsider to the project ,
 Their expectations need to be managed ,
 They can provide important information on the progress of the project.
1.2. Project and related terminologies

1.2.1. Projects and Plans

Project is a temporary endeavor to create a unique product, service, or result. So producing the
deliverable the project team needs a plan. That means plan is how and when the project team will
perform the activities to produce the deliverables of the project.

Project planning involves a series of steps that determine how to achieve a particular community or
organizational goal or set of related goals. This goal can be identified in a community plan or a
strategic plan. Project plans can also be based on community goals or action strategies developed
through community meetings and gatherings, tribal council or board meetings, or other planning
processes. The planning process should occur before you write your application and submit it for
funding.

Project planning:

- Identifies specific community problems that stand in the way of meeting community goals.
- Creates a work plan for addressing problems and attaining the goals.
- Describes measurable beneficial impacts to the community that result from the project’s
implementation.
- Determines the level of resources or funding necessary to implement the project
 Planning consists of a set of procedures whereby decision makers attempt to:
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• Identify and define major problems and goals,
• Analyse relevant environment and strategic conditions,
• Project trends, needs, opportunities and constraints,
• Transform goals into operational targets,
• Identify alternatives course of action for achieving goals and targets,
• Calculate cost and benefit of each alternative,
• Estimate the probabilities of future events,
• Projected trends occurring,
• Determine the potential non-economic gains,
• Losses and consequences of each alternative,
• Choose the optimal alternatives or set of actions,
• Integrate the chosen course of action into a comprehensive plan
1.3. Project, program and portfolio
Project management processes, tools, and techniques puts in place a sound foundation for
organizations to achieve their goals and objectives. A project may be managed in three separate
scenarios: as a stand-alone project (outside of a portfolio or program), within a program, or within
a portfolio. Project managers interact with portfolio and program managers when a project is
within a program or portfolio. For example, multiple projects may be needed to accomplish a set
of goals and objectives for an organization. In those situations, projects may be grouped together
into a program. A program is defined as a group of related projects, subsidiary programs, and
program activities managed in a coordinated manner to obtain benefits not available from
managing them individually. Programs are not large projects. A very large project may be referred
to as a megaproject. As a guideline, megaprojects cost US$1billion or more, affect 1 million or
more people, and run for years. Some organizations may employ the use of a project portfolio to
effectively manage multiple programs and projects that are underway at any given time. A
portfolio is defined as projects, programs, subsidiary portfolios, and operations managed as a
group to achieve strategic objectives. Figure 1-3 illustrates an example of how portfolios,
programs, projects, and operations are related in a specific situation. Program management and
portfolio management differ from project management in their life cycles, activities, objectives,
focus, and benefits. However, portfolios, programs, projects, and operations often engage with the
same stakeholders and may need to use the same resources (see Figure 1-3), which may result in a
conflict in the organization. This type of a situation increases the need for coordination within the
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organization through the use of portfolio, program, and project management to achieve a
workable balance in the organization.
Figure 1-3 illustrates a sample portfolio structure indicating relationships between the programs,
projects, shared resources, and stakeholders. The portfolio components are grouped together in
order to facilitate the effective governance and management of the work that helps to achieve
organizational strategies and priorities. Organizational and portfolio planning impact the
components by means of prioritization based on risk, funding, and other considerations. The
portfolio view allows organizations to see how the strategic goals are reflected in the portfolio.
This portfolio view also enables the implementation and coordination of appropriate portfolio,
program, and project governance. This coordinated governance allows authorized allocation of
human, financial, and physical resources based on expected performance and benefits.

B1

Looking at project, program, and portfolio management from an organizational perspective:

 Program and project management focus on doing programs and projects the “right” way; and

 Portfolio management focuses on doing the “right” programs and

projects.

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1.3.1. PORTFOLIO MANAGEMENT
A portfolio is defined as projects, programs, subsidiary portfolios, and operations managed
as a group to achieve strategic objectives. Portfolio management is defined as the centralized
management of one or more portfolios to achieve strategic objectives. The programs or
projects of the portfolio may not necessarily be interdependent or directly related.
The aim of portfolio management is to:
 Guide organizational investment decisions.
 Select the optimal mix of programs and projects to meet strategic objectives.
 Provide decision-making transparency.
 Prioritize team and physical resource allocation.
 Increase the likelihood of realizing the desired return on investment.
 Centralize the management of the aggregate risk profile of all components.
Portfolio management also confirms that the portfolio is consistent with and aligned with
organizational strategies. Maximizing the value of the portfolio requires careful examination
of the components that comprise the portfolio. Components are prioritized so that those
contributing the most to the organization’s strategic objectives have the required financial,
team, and physical resources. For example, an infrastructure organization that has the
strategic objective of maximizing the return on its investments may put together a portfolio
that includes a mix of projects in oil and gas, power, water, roads, rail, and airports. From
this mix, the organization may choose to manage related projects as one portfolio.
All of the power projects may be grouped together as a power portfolio. Similarly, all of the
water projects may be grouped together as a water portfolio. However, when the
organization has projects in designing and constructing a power plant and then operates the
power plant to generate energy, those related projects can be grouped in one program. Thus,
the power program and similar water program become integral components of the portfolio
of the infrastructure organization.
1.3.2. PROGRAM MANAGEMENT
Program management is defined as the application of knowledge, skills, and principles to a
program to achieve the program objectives and to obtain benefits and control not available
by managing program components individually. A program component refers to projects
and other programs within a program. Project management focuses on interdependencies

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within a project to determine the optimal approach for managing the project. Program
management focuses on the interdependencies between projects and between projects and
the program level to determine the optimal approach for managing them. Actions related to
these program and project-level interdependencies may include:
 Aligning with the organizational or strategic direction that affects program and
project goals and objectives;
 Allocating the program scope into program components;
 Managing interdependencies among the components of the program to best serve the
program
 Managing program risks that may impact multiple projects in the program;
 Resolving constraints and conflicts that affect multiple projects within the program;
 Resolving issues between component projects and the program level;
 Managing change requests within a shared governance framework;
 Allocating budgets across multiple projects within the program; and
 Assuring benefits realization from the program and component projects.
An example of a program is a new communications satellite system with projects for the
design and construction of the satellite and the ground stations, the launch of the satellite,
and the integration of the system. For more information on program management, see The
Standard for Program Management
1.2.3 Operations and Project Management.
Project management is defined in different ways in the research literature.
Some of these definitions are as follows:
Project Management is describe as a collection of tools and techniques to direct the use
of diverse resource toward the accomplishment of a unique, complex, one time task within
time, cost and quality constraint. Each task requires a particular mix of these tools and
techniques structured to fit the task environment and life cycle (from conception to
completion) of the task.
Project Management is express as planning, organizing, monitoring and controlling of all
the aspects of a project and the motivation of all the involved stakeholders to achieve the
project objectives safely and within agreed time, cost and performance criteria.

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 Project management is term as an application of knowledge, skills, tools and techniques
to project activities to meet project requirements. Project Management is accomplished
through the application and integration of the project management processes of initiation,
planning, executing, monitoring and controlling and closing.
Project management is also articulated as a professional’s capability to deliver, with due
diligence, a project product that fulfills a given mission, by organizing a dedicated project
team, effectively combining the most appropriate technical and managerial methods and
techniques and devising the most efficient and effective breakdown and implementation
route. Please see the following organizational project management differences

Organizational Project
Management
Projects Programs Portfolios
Definition A project is a A program is a group of A portfolio is a
temporary endeavor related projects, collection of projects,
undertaken to create a subsidiary programs, and programs, subsidiary
unique product, service, program activities that portfolios, and
or result. are managed in a operations managed as
coordinated manner to a group to achieve
obtain benefits not strategic objectives.
available from managing
them individually.
Scope Projects have defined Programs have a scope Portfolios have an
objectives. Scope is that encompasses the organizational scope that
progressively scopes of its program changes with the
elaborated throughout components. Programs strategic objectives of the
the project life cycle. produce benefits to an organization.
organization by ensuring
that the outputs and
outcomes of program
components are delivered
in a coordinated and
complementary
manner.
Change Project managers expect Programs are managed in Portfolio managers
change and implement a manner that accepts continuously monitor
processes to keep change and adapts to change as changes in the broader
managed and controlled. necessary to optimize the internal and external
delivery of benefits as the environments.
program’s components

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 deliver outcomes and/or
outputs.

Planning Project managers Programs are Portfolio managers

progressively elaborate managed using create and maintain
high-level information high-level plans that necessary processes and
into detailed plans track the communication relative
throughout the project Interdependencies and to the aggregate
life cycle. progress of program portfolio.
components. Program
plans are also used to
guide planning at the
component level.
Managem Project managers Programs are managed Portfolio managers may
ent manage the project team by program managers manage or coordinate
to meet the project who ensure that program portfolio management
objectives. benefits are delivered as staff, or program and
expected, by coordinating project staff that may have
the activities of a reporting responsibilities
program’s components. into the aggregate
portfolio.
Monitori Project managers Program managers Portfolio managers
ng monitor and control the monitor the progress of monitor strategic
work of producing the program components to changes and aggregate
products, services, or ensure the overall goals, resource allocation,
results that the project schedules, budget, and performance results,
was undertaken to benefits of the program and risk of the portfolio.
produce. will be met.
Success Success is measured byA program’s success is Success is measured in
product and project measured by the terms of the aggregate
quality, timeliness, budget
program’s ability to investment performance
compliance, and degreedeliver its intended and benefit realization of
of customer benefits to an the portfolio.
satisfaction. organization, and by the
program’s efficiency and
effectiveness in
delivering those
benefits.
Table 1-2 gives a comparative overview of portfolios, programs, and projects
1.4. Project Planning in the public sectors and their difference from others
Projects are special types of organizations. So there may exist two groups of differences between
public projects and projects of other sectors.

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  The first group of differences may be due to differences between public organizations, and
organizations of other sectors. For example, employees of public organizations are less
committed to their work than employees of private sector organizations. The second kinds
of differences are differences specific only to projects. For example, in the gate review
process there are fewer gates in public projects than in private ones. In the research of
organizations, there are three main models of the differences between public and private
organizations:
 In the research of organizations, there are three main models of the differences between
public and private organizations.
1. The generic model
2. The core model
3. The dimensional model.
1. The generic model
According to the Generic model, all organizations are similar; there are no fundamental
differences between public and private organizations. At the project area, this approach
would mean that there are no differences between public projects and private projects.
Representative of this school of thought was the approach proposed by the Project
Management Institute, at least until the publication of the Government Extension to
PMBOK® Guide4. According to this, the guidelines for schedule development and rules of
quality management are the same for projects in all sectors.
2. The Core model
According to the core model, there are substantial differences between public sector and
other sector organizations. These differences stem from the formal status of public
organizations, which implies substantial differences in the processes implemented in
organizations of different sectors. These differences were first identified in a statement by
Sayre who proposed that "public and private organizations are similar in all unimportant
aspects". In the project area, such an approach may manifest by stressing, for example, ways
of procurement management and stakeholder management, where there are substantial
differences due to legal regulations.

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3. Dimensional model
The dimensional model is one in which the "publicness" of an organization should be
analyzed in several dimensions. For each dimension, a continuum of values exists between
fully private and fully public. In this model, organizations can be more or less public on any
dimension in relation to other institutions. The dimensions of the publicness are:
 Ownership,
 Funding,
 Mode of social control.
The most public organizations are those that are owned by the state, funded by the state and
are subject to public scrutiny exclusively by the state. This group includes all government
agencies, e.g. ministries and central offices. The most private organizations are those owned
and funded by private entities and controlled by market forces. However, according to the
dimensional approach, there may exist organizations that are public in the dimensions of
Ownership and Funding, but are private in the Mode of Social Control dimension. A good
example may be public universities which, though owned and funded by the state, must
regularly compete with private educational institutions. There are also organizations that
are owned by private entities but may be funded by the state, and who are still subject to
social control (not necessarily financial); for example, private companies responsible for the
maintenance of public roads. Energy companies are a good example of organizations that
are owned and financed by private entities, but are still subject to state control.
 When we come to some practical research Public project management as a whole is

considered more complex than private project management.

 There are many reasons for the greater complexity of public stakeholder project
management. Public projects are more exposed to external factors than private projects.
Therefore, the number of public projects stakeholders is greater than the number of
private projects stakeholders
 The way of public projects execution, and especially criticism to which they are exposed,
often affects the public image of the government accountable for these projects. Public
projects must therefore take into account the interests of politicians who may have
different political affiliations and may not always fully understand the principles of
project management. Other important stakeholders include legislators whose

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 requirements must be met, as well as project shareholders whose requirements must be
subordinated to the interests of the two aforementioned groups. Other types of external
public projects stakeholder include public agencies with which interagency agreements
must be established. Managers of public projects must take into account a higher level of
interdependence between these organizations.
 Public projects are based largely on contracts executed by external companies. It is therefore
necessary to ensure the efficient cooperation of the project team with staff involved in the
procurement process. In the area of procurement management, the evaluation criteria for
purchasing goods in public and private projects are different. In the private sector, the
decision is usually based solely on price, whilst in the public other factors may come into
play. This is often because there are many measures of success for the public project, not
necessarily related to finance; for example, the satisfaction of communities for whom public
projects are executed, the development of specific sectors activities, or preferences for
disadvantaged social groups. Therefore, a selection of products purchased by public projects
must also take into account several criteria, many of which are not always easy to measure.
The so-called ‘red tapes’ – the formal regulations procedures and rules associated with this
sector – often complicate purchasing and commodification processes. The phrase ‘red tapes’
dates from 17th-century England, where official documents were banded with red tape. Red
tapes most readily affect two management areas: procurement management and personnel
management. So far, studies of permanent organizations have shown a greater impact of red
tapes on the functioning of managers in the public sector than in the private one. In other
words, public organizations are more bureaucratic.

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