Introduction To increase productivity, organizations build supply relationships with other firms to develop new improved methods and

business opportunities for competitive advantage, which are sealed by contracts (Sollish &Semanik, 2007, p. 217). Dictionary.com (n.d) defines contracts as an agreement between two or more parties for the doing or not doing something specified. Project contracts involve an offer made by the client, and an acceptance by the supplier to provide goods or services based on an agreement, and how to resolve negative situations that arise. Contract risk mitigation, and team role responsibilities. Contracting, like other aspects of projects have risks; which according to Aron et al. (2005, p. 41) are grouped into: a) Strategic risks caused by the deliberate actions of vendors to exploit clients by offering less quality services to maximize profits. b) Operational risk due to the breakdown of operations in the vendors location by uncontrollable circumstances. c) Long-term intrinsic risks of atrophy like the losing of core skilled staff due to continuous complete outsourcing of tasks they are specialized in, d) Intrinsic risks of location like changes in exchange-rate. Cavinato et al. (2006, p. 386) provides more risks like; risks due to capacity constraints, change in market prices, legal liabilities, etc. When drafting contract agreements, organizations develop contract clauses which transfer or share risks between both parties based on their competence and ability to access, control and reduce the effects identified risks (Andi, 2006, citing Fisk, 1997). It is the task of the project manager, with the help of other professionals in different fields involved in the project to identify and allocate risks to competent people who would manage them from the earliest stages of contract formulation, to contract closure (Cooper et al. 2005). Legal liabilities arise when organizations sign contracts without understanding the binding terms of the contract. Telecommunication firms in Nigeria outsource most of their services; some contractors build the cell tower sites, some its maintenance. During downtime (due to power failure or unforeseen factors), contractors in charge of site maintenance are given 2 hours grace to rectify the problem before being later charged $6,000.00 USD per hour until the site is restored back online. Risk of a downtime occurring has been transferred to the vendor. Before accepting such contracts, the vendors project managers, attorneys and accountants are to go through and understand the contract terms, and then look for mitigation strategies for this risk like insuring sites to reduce fine burden if the site goes down for more than 2 hours due to fire outbreak. Shirking is a strategic risk where contractors maximize profits by deliberately doing less work than they are paid for because they do not have enough human capacity to execute the task (Aron et al., 2005, p. 41). Clients mitigate this through collaborative efforts of the project

manager and the procurement manager by sourcing and using competing vendors to maintain different sites; their performances compared, and then selecting the best performing contractor for future projects. With modern communication data sharing platforms, project managers can also monitor the actions of the vendors personnel, thereby reducing operational risks (Aron et al., 2005). To mitigate capacity constraint of material suppliers, the clients project manager and procurement team use the services of alternative vendors to supply the materials so that incapacity on one supplier doesnt affect the project progress (Cavinato et al., 2006). Conclusion: Failure to deal with risks puts projects into cost and time overrun problems (Andi, 2006, citing Thompson and Perry, 1992). To properly mitigate contractual risks, the project manager should form a team that involves members from the legal, technical, financial, and purchasing disciplines; who would through proper communication and information sharing, jointly solve the problems of identifying, assessing, quantifying, allocating and monitoring the management of these risks at all times (Edwards, 2006, pp. 198). Reference: Andi 2006, 'The importance and allocation of risks in Indonesian construction projects', Construction Management & Economics, 24, 1, pp. 69-80, Business Source Complete, EBSCOhost, viewed 21 March 2014. Aron, R, Clemons, E, & Reddi, S 2005, 'Just Right Outsourcing: Understanding and Managing Risk', Journal Of Management Information Systems, 22, 2, pp. 37-55, Business Source Complete, EBSCOhost, viewed 20 March 2014. Cavinato, J.L., Flynn, A.E. & Kaufmann, R.G. (eds.) (2006) Supply management handbook. 7th ed. New York: McGraw-Hill [Online]. Available from: http://site.ebrary.com.ezproxy.liv.ac.uk/lib/liverpool/docDetail.action?docID=1015501 9 (Accessed: 20th March 2014) Cooper, D. Grey, S. Raymond, G. and Walker, P. (2005) Project Risk Management Guidelines: Managing Risks in Large Projects and Complex Procurements. New Jersey: John Wiley & Sons. Dictionary.com (n.d) contract [Online]. Available from: http://dictionary.reference.com/browse/contract (Accessed: 20th March 2014) Edwards, J.A. (2006) Project procurement management in practice. In: Dinsmore, P.C. & Cabanis-Brewin, J. (eds.) AMA handbook of project management. 2nd ed. New York: AMACOM. Sollish, F., Semanik, J., (2007) The procurement and supply manager's desk reference. Hoboken: John Wiley & Sons.