A small company signed time&material type of contract with client A which basically guarantee that 3 people would work on project for the client. The cooperation lasts a few quarters already and so far both sides were happy with it.

In the meantime another very important client B orders a big system from the company and basically everyone except of PM is taken to work on the new system. It is a decision made at the very top of the company which PM has no control over. The situation is temporary but will last about a couple of months.

What can PM do to maintain good relations with the client A and avoid losing the contract with them?

  • Is this delaying work for client A, or is it just the resources they're paying for used elsewhere? Many moons ago, I was in a similar position, as a cross-deployed resource. Our 'client A' was happy enough, as long as the the resources were there when they needed them.
    – Phil Lello
    Commented May 6, 2011 at 20:43
  • 2
    This is a related question that's worth linking here in the comments: What Are The Steps I Need To Take When Putting a Project On Hold?
    – jmort253
    Commented May 7, 2011 at 2:08
  • @Phil - Actually both as under time&material contract there are some ongoing R&D projects. In other words, there's no chance client A won't see the difference. Commented May 7, 2011 at 7:51
  • Except escalate the situation to the hierarchy of your company in the unlikely case nobody is aware of it, I don't see much that can be done on a PM level. Doing so will also help you to prove you're not responsible for the forseable loss of the customer... Commented May 7, 2011 at 15:59

6 Answers 6


In this situation, it's best to communicate the situation to the client. Unfortunately, ignoring the problem won't make it go away. If you choose to say nothing, it will only make you look incompetent when the client discovers that progress has either slowed drastically or come to a screeching halt.

If you inform the client as soon as possible of the changes, there's a strong chance that they can make arrangements to their plan and make adjustments to their schedule. They may still be upset and may cancel, but if they are dependent on you, they may be able to meet you in the middle.

Just remember, you're dealing with real people who have bosses and managers that they have to answer to as well, and by informing them early, you can help prevent them from looking bad in front of the people they answer to.


I've actually been in this situation and both David and Steve make good points. Senior management made the decision to renege on the contract with client A, so it's outside the PM's authority to do anything about that aspect of it. Senior Mgmt will have to do the explaining.

To Steve's point, in the meantime the PM can try to do as much damage control as he can, but really he's going to be limited in what he can say. He's walking a fine line between lying to the client, and throwing his bosses under the bus.

Best path is to go to Senior Mgmt and say "you've made this decision which puts us in a bad spot with Client A. What do you want me to tell them when they ask why no one's available? There are three options - I can tell them the truth, I can lie, which I won't do, or I can refer them to you. How would you like me to handle this?"


If the relationship with client A is good enough then level with them and explain the problem. The alternative being to keep them in the dark. I think client A is likely to discover this, and that would burn a lot of the client's trust.

The problem with leveling is that they will not trust that your top managers will not throw them aside again in the future should another big fish come along.

It might be wise to get buy in from the bosses before talking with the client. Ask for their buy in and at the same time present ways to demonstrate their commitment to client A. Some part time help from some of the people diverted to project B might help.

As a contractor you are being paid to provide solutions. So, don't present the problem at hand to client A unless you can also provide some kind of solution, even imperfect.

  • +1 for "It might be wise to get buy in from the bosses before talking to the client. Also, if you have a relationship manager (sales manager / account manager), you may wish to include them in the discussion too.
    – Iain9688
    Commented May 7, 2011 at 8:55

The company has abandoned its obligations under the T&M contract. This is actionable and it appears the company has accepted the possibility of a suit. The way I am reading this, this issue is way outside the scope of the PM to handle. I cannot see how the PM can facilitate a solution in this case.


Would this small company consider interns as a temporary measure?

Given the current economic climate and the labour market crisis you can find a lot of professionals (not recent graduates only) that would prefer working for free for a period of time (or volunteer) rather than lose the experience opportunity.

If this company could manage to gather at least a 50% of resources to allocate to client A the project could be handled at some extension. However, it would be really important that the Client A is advised of the current situation and supports your willingness to find a solution for them (even if it's slower).

I have met people that had taken temporary jobs for free because it keeps developing them and helps to cover gaps on their CVs.

  • I like this suggestion; I would prefer to see the interns go to 'client B', assuming client B isn't also on a T&M contract.
    – Phil Lello
    Commented May 6, 2011 at 20:48
  • @Phil - The only problem with interns may be the lack of experience. I'm not sure I'd want interns working on my project if it was critical. Also, even with experienced people, it's not always simple to hand off a project from one group to another if it's highly technical.
    – jmort253
    Commented May 8, 2011 at 21:50
  1. Communicate the situation to the client A (most likely through account or seniors)
  2. Expand the team
  3. Multitask

In our (software development) company we successfuly exploit (2) and (3). Given we don't promise certain time committment per day/week, we have that option. On the other hand, we communicate expected delivery date, which puts considerable pressure on our process and team.

Your mileage may vary.

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