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Commercial Contract Management

Date: 6 November 2017 - 10 November 2017
Course ID: ADDQ037/2017
Duration: 5 Days
Fee US $ + VAT: 3950 US$
Venue: Kuala Lumpur / Malaysia

Introduction:

People of technical or financial background are frequently called upon to manage commercial contracts without having a proper level of competency in the subject. This frequently leads to disputes with the other parties to the contract as well as delays and cost overruns.

This course will introduce technical and financial people to the subject of commercial contract management, providing with basic tools that will enable them to select, plan and execute commercial contracts effectively and efficiently. The course will also introduce the subject of claims management through international best practices.

The main focus of the course will be on the best practices aspects of the subject with the presentation of many actual case studies. Several standardized forms of contract documents will be introduced and discussed.

Objectives:

At the end of this course participants will be able to :

• Know the difference between contract types, consequently be able to select a contract form

• Identify contracts general and specific conditions

• Acknowledge contract documentation and its priority

• Select the most suitable contracting strategy

• Identify the trio of the contract and risk allocation between the parties

• Identify elements of contract execution and control

• Prepare, analyze and settle claims

• Identify terms and conditions-examples of commercial terms

• Understand contract administration techniques

• Manage claims and disputes

• Understand the fundamental legal concepts and definitions that apply to most types of contracts, specifically, binding terms and conditions, breach of contract, change management and dispute resolution

• Recognize how contractor claims can develop and escalate, and how to incorporate procedures by which such claims cam be limited and controlled

Who should attend:

This course is recommended for anyone involved with the construction stage of Oil & Gas projects, Constructions and even with the maintenance and repair operations:

• Chief Executive Officers,

• Finance Managers,

• Program and Project Managers,

• Engineers and Planners,

• Functional managers and process owners with resources,

• Contracts Officers and Managers, and

• Construction Engineers.

Daily Outlines:

The legal principles behind commercial contracts

[I] Basic Contract Law

[II] Types of Laws binding various Contracts

[III] Elements Of A Binding Contract

[IV] The Contractual Scene



Commercial Contract

• Definition

• Parties to contract

• Creatures of contract

• Types of contract

 Lump sum

 Fixed price or firm price

 Measure and value

 Cost plus

 Turn-key contracts



• Sub-Contracts

 Domestic

 Nominated



Making of a contract

• Invitation to tender

• Tender

• Correspondence

• Acceptance

• Letter of intent

• Form of contract



TYPES OF COMMERCIAL CONTRACTS

 Checklist for contract Options

 Types of contracts

A. Classification According To Contract Price

B. Classification According To Nature of Works

C. Classification According To Scope of Works

D. Classification by Method of Evaluating Contract Price

E. Other Types of Contracts



COMMERCIAL CONTRACT DOCUMENTATION AND CONDITIONS

 The Language of the contract

o The cost of contract Language

o What are the risk clauses

o Ambiguity

o Specification problems

o Technical Data Group



 Form and purpose of Contract Documents

 Contracts Conditions and Documentations

o What does a contract Consists of

o General conditions

o Specific Conditions

o The contract documents

 The Conditions of Contract

 Drawings

 Specifications

 BOQ

 Instruction to Tenderers

 Form of Tender

 Form of Agreement

 Form of Bond

 Documentation

o Matters concerning the contract itself

o Matters concerning the execution of work

 The contractor's overall obligation

 Adverse physical conditions

 Site

 Care of the works and damage to third parties

 Powers of the employer/engineer to vary the work

 Testing of materials and workmanship

 Completion, remedying of defects



SETTING UP A SYSTEM FOR MONITORING AND CONTROL

 Steps for monitoring and control

o Planning Page : Vendor/Contractor Selection Program

o Planning Page : Selection Documentation Monitoring Checklist

o Planning Page : Monitoring Checklist for Purchase/Order Contract Development Award

o Planning Page: Monitoring Checklist for General Duties/ Administration



TYPES OF CHANGES AND VARIATION

 How to audit your contract

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COMMENCEMENT, DELAYS, SUSPENSION AND COMPLETION

 Setting up a system for monitoring and Control

 Commencement of Works

 Possession of Site

 Extension of Time for Completion

 Rate of Progress



 Completion and Maintenance

 Completion Certificate

 Maintenance and Defects



Contract Execution and Control

a. Reporting

b. Payment

c. Change Orders

d. Key Areas of Workmanship and Time

i. Staff and Labor

ii. Plant, Materials and Workmanship

iii. Commencement, Delays and Suspension

iv. Tests and Defects Liability

e. Financial Clauses and Procedures

i. Cost/Price Analysis

ii. Measurement and Evaluation

iii. Economic Price Adjustment

iv. Variation and Adjustment

Case Study



Claims

a. The Claims Environment

b. Contract Clauses Frequently Causing Claims

c. Claims Preparation

d. Claims Analysis

e. Claims Negotiation and Settlement



Settlement of disputes arising from contract execution

a. Amicable Settlement

b. Arbitration (with an introduction to the different rules of arbitration)

c. Alternative Dispute Resolution (ADR)



Case Study



TRAINING METHOD



o Live group instruction

o Use of real-world examples, case studies and exercises

o Interactive participation and discussion

o Power point presentation, LCD and flip chart

o Self-test and group activities

o Each participant receives a binder containing a copy of the presentation slides and handouts



PROGRAM SUPPORT

This program is supported by interactive discussions, role play, case studies and to highlight the techniques available to the participants.

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