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?
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.
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:
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.
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.