1

If the customer issues a Letter of Award or service order and asks us to provide a service in the form of a project, can it be considered as a Project Charter?

2

The Project Charter goes by a lot of names, and can be anything that authorizes the project AND outlines what the project is. So in this case, the LOA WITH the project proposal would count as the Charter. It's the two combined that create the Charter.

The LofA by itself wouldn't be sufficient as it (most likely) doesn't include all of the detail necessary.

1

No, a Letter of Award is not the same as a Project Charter. The scope of a Letter of Award is tiny in comparison to that of the Project Charter.

While they are very similar, they are not.

The Letter of Award says that you've won the bid on the project, while the Project Charter authorizes the Project Manager to begin work on the project, among other things.

Below is some information that helps differentiate between the two types of documents:

Letter of Award:

From How to Write a Letter.net

A letter of award is a letter that is sent to a bidder on a business related contract that has been awarded the contract. This type of letter is very common in auction situations, where multiple parties are bidding on the same job. For example, if a company was taking bids on contactors to expand their factory, they would send a letter of award to the contractor they chose to complete the job for them. Essential information to include in a letter of award include the following:

  • Amount of award – the amount in monetary terms that the contract is for
  • Award date - the date on which the award was made
  • Contract sign date – the date on which the final contract will be signed

This information can be summarized in a simple, one page letter. See the example Letter of Award for an example of what this letter might look like.

Project Charter:

From Mastering Project Management:

According to the PMBOK® Guide, the content of the Project Charter should include, either within the document or as a reference to other documents, the following:

  • Business needs, high-level project description, or product requirements that are the focus of the project
  • Specific customer and other stakeholder project needs or expectations
  • Project purpose or justification
  • Assigned Project Manager and authority level
  • Summary milestone schedule
  • Stakeholder influences
  • Functional organizations involved and their participation
  • Organizational, environmental, and external assumptions and constraints
  • Business case justifying the project, including a return on investment (ROI) and preliminary budget summary

It's quite possible that you'll know a lot of this information before you win the bid, and it's quite possible that you'll be working on the Project Charter while negotiating; however, the two documents are not the same.

  • As a small company which practises and adopts semi-formal project management, they only develop a project proposal. If the client approves the project proposal, then they are agreeing to all the terms, and more importantly, they are agreeing to pay for the project according to the payment terms as stated in project proposal. Hence, the client's approval of the project proposal will authorize work on the project providing a letter of award or contract or service order. In this case can the project proposal evolve to be a project charter provided it has been agreed by both parties? – Hairul May 29 '12 at 4:35
  • Academically, I'm not 100% sure. The PMBOK's official word is that they're separate docs. But practically, I think that the information in the proposal could be used in the Charter, depending on what the proposal includes. – jmort253 May 29 '12 at 4:40
  • Is it MUST that every project should have project charter? – Hairul May 29 '12 at 4:47
  • According to the PMI, the official source, the answer is yes. Even small projects should have a charter. pmi.org/eNews/Post/2008_02-08/QQ_WeAreSoBusyatMyOrg.html – jmort253 May 29 '12 at 4:52
  • In that case should have. Maybe they use different to terms but reflect the same things. – Hairul May 29 '12 at 8:02

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