contract essentials – What Is Piping

Contract management or Contract Administration can be defined as the management of contracts made with customers, vendors, partners, or employees. Contract management involves the negotiation of the terms and conditions in contracts ensures compliance with the terms and conditionsdocumentation on the agreement of any changes or amendments that may arise during its implementation or execution. Hence, Contract Management can be summarized as the process of systematically and efficiently managing contract creation, execution, and analysis for the purpose of maximizing financial and operational performance and minimizing risk. What are the Contract Essentials? Essentials of Contract are - Contract Agreement, the Letter of Acceptance, the Letter of Tender, these Conditions, the Drawings, the Schedules, BOQ, Contractors Personnel, DAB-Dispute Adjudication Board, General Conditions of the Contract, Special Conditions of the Contract, documents listed in Contract Agreement or Letter of Acceptance, Base Date, Commencement Date, Time of Completion, Tests on Completion, Take-Over Certificate, DLB-Defect Liability Period, Performance Certificate, Accepted Contract Price, Payment Certificates, Foreign Currency, Advances, Split of Responsibility, Force Majeure, NDA, etc.” Priority of Documents 1. The Contract Agreement2. Letter of Acceptance3. Letter of Tender4. GCC – General Conditions of Contract5. SCC – Special Conditions of the Contract6. The Specifications7. The Drawings8. The Schedule, Planning9. Split of Responsibility10. Resource Mobilization – Manpower, Machinery, Transport,11. Home Office Organogram, Site Organogram, CV of Key personnel12. Logistic details13. List of approved Vendors and Contractors14. Communication15. Confidentiality, NDA, Code of Conduct, Ethics,16. Joint and Several Liabilities17. Compliance with Laws, Jurisdiction, Legality, Local Arbitration Act, Foreign Arbitration UNCITRAL-New York Convention, SIAC-Singapore International Arbitration Centre, LCIA-London Court of Internation Arbitration.18. Right of Access to Site by Employer19. Permits, Licenses, Statutory Approvals,20. Employers Personnel, Communication, Financial Arrangements, Claims Engineer-In-Charge Responsibilities & Accountabilities, Delegation, Instruction by Engineer, Replacement of Engineer,21. Contractors General Obligation22. Performance Security, DLP Security23. Contractors Representative, Sponsor24. Subcontractors, Vendors, Suppliers, Service Providers, etc25. HSE, QA, ITP26. Site Data provided by Employer – Soil Investigation Report, ROW, ROW, Access Route, Transportation, Unforeseeable Physical Conditions, Protection of Environment, Electricity & Water, Employers Equipment & FIM,27. Progress Reports, Weekly, Monthly Meetings28. Security of Site and Resources29. Fossils30. Subcontractors appointment, IR & Statutory compliance, Objections, Payments,31. Insurance – CAR Policy, Mediclaim Policy,32. Taxes, and statutory compliance, check returns are filled by Vendor, Contractors GST33. Plant, Material & Workmanship – QA- Acceptance Criteria, Inspection, Acceptance, Rejection, Remedial works,34. Royalty Payments35. Commencement, Delays & Suspension – Schedule, Programme, Extention of Time, Cause of Delay, Delay Damages, Suspension of Work, Consequences of Suspension, Evidence of Payment/Recovery in case of Suspension,36. Testing on Completion, Commissioning, and Handover to Client37. Defect Liability Period – Remedying of Defects, Cost, Extension, Failure, Removal of Defective Work, Performance Certificate, Clearance.38. Measurement Quantity Surveying – Work to be measured standards, Method of Measurement, Evaluation,39. Variation and Adjustment40. Value Engineering41. Day Work – Day Work Schedule, Overtime,42. Adjustment for Change in Cost43. Contract Price & Payment – Lumsum, Unit Rate, MOU, Open Book Estimate, Advance Payment, Schedule of Payment, Retention, Interim Payment, Delayed Payment Interest, Statement of Completion & Final Payment.44. Termination by Employer – 28 Days45. Suspension & Termination by the Contractor – 42 Days46. Risk & Responsibility – Indemnity, Employers Risk, Force Majeure47. IP-Intellectual Property Rights48. Warranties49. Insurance – CAR Contractors All Risk, Insurance of Works and Contractors Equipment, Insurance against Injury to person and damage to property, Insurance against major accident, Casualty & coverage of benefits50. Claims, Disputes & Arbitration for Extention of Time & Cost - Appointment of DAB-Dispute Adjudication Board. Claim recognition within 42 days, Claim Notice 28 Days, Dispute Settlement, Obtaining DAB’s decision, Amicable Settlement. DAB gives its decision within 84 days51. Arbitration – If DAB’s decision is not acceptable then revoke for International Arbitration Grounds for Extension of Time 1. Variation in Scope of Work, Specification, Drawings, Quantity, Soil Conditions compared to agreed Contract.2. Exceptionally adverse climatic conditions3. Unforeseeable shortages of personnel or Goods, caused by an epidemic or Government policy change4. A delay caused by the Employer or Party under his control5. Late information, Denied or Late Access or possession6. Errors in setting out information7. Adverse physical conditions8. Fossils9. Testing10. Delay caused by Authorities11. Engineers instruction to suspend work12. Employers interference with Tests on Completion13. Employers Risks14. Force Majeure15. IT outage Instruction to Bidders 1. Bidder Requirements2. Submission Of Proposal3. Technical Proposal4. Commercial Proposal5. Preparation Cost6. Governing Terms & Conditions7. Definitions8. Acknowledgment9. Written Proposals10. Right Of Acceptance11. Bidder's Modification And Withdrawal Of Proposal12. Company Policy13. Pricing Conditions14. Insurance15. Schedule16. Exceptions And Deviations17. Rfp Explanation Meeting And Site Inspection18. Discrepancies And Omissions/Addenda19. Confidentiality Agreement20. Return Of Documents21. Taxes22. Local Labor And Services23. Signature Requirements24. Bonding25. Permits And Licenses26. Safety Standards27. Key Personnel28. General Notes29. Enclosures Form of a Proposal 1. Commercial Proposal Transmittal Letter2. Pricing3. Bidders Representations and Certifications4. Project Performance Bond/Guarantee Letter5. Insurance Certificate6. Business Conduct and Ethics Expectations for Suppliers and Contractors7. Commercial Exceptions – Qualifications8. Technical Proposal Transmittal Letter9. Schedule Requirements10. Execution Plan11. Subcontract Plan12. Temporary Facilities Plan13. Equipment Plan14. Health, Safety, Environmental, and Security Plan15. Material Management Plan16. QA/QC Plan17. Technical Exceptions and qualifications Scope of Work 1. Description Of Work – General2. Specifications, Drawings, Attachments, And Exhibits3. Description Of Work – Specific4. Material, Permanent Equipment, Or Permanent Work Site Services Furnished By Company5. Temporary Construction Facilities And Utilities6. Performance Schedule And Sequence Of Work7. Reporting Requirements And Coordination Meetings8. Data Requirements9. Clean-Up, Safety, Work Rules, And Regulations10. Quality Control11. Construction12. Executive Sponsor Commercial Terms 1.0 Contract Price2.0 Pricing Basis3.0 Pricing For Changes4.0 Taxes5.0 Payment Terms6.0 Back charges7.0 Company Procurement8.0 Scrap And Excess Materials9.0 Utilities And Site Facilities10.0 Defect Liability Period11.0 Liquidated Damages Commercial Schedules 1.0 Schedule - A Lump-sum2.0 Schedule - B Unit Prices And Methods Of Measurement3.0 Schedule - C All-Inclusive Labor Rates4.0 Schedule - D Equipment Rates5.0 Schedule - E-List Of Subcontractors6.0 Schedule - F Material Suppliers7.0 Schedule - G Small Tools / Expendable / Consumable /Safety Supply List8.0 Schedule – H Insurance9.0 Schedule – I Final Payment Release Form10.0 Schedule – J Bank Guarantee’s, SBLC for Performance (Services) GCC - General Conditions of Contract 1 Definition And Interpretation2 Work Locations And Examining Documents3 Intent Of Specifications And Plans And Drawings4 Plans And Drawings And Specifications: Issued For Construction5 Alterations In Specification, Plans, And Drawings, Scope Of Work6 Work Quality Standards7 Consumables, Materials, Manpower And Construction Equipment8 Utilities And Site Facilities9 Performance Of Work10 Inspection And Testing11 Measurement And Payments12 Remedy Of Defects13 Performance Security14 Other Obligations Of Contractor15 Safety Regulations, Accident And Damage16 Representations And Warranties17 Infringement18 Confidentiality And Non-Disclosure19 Ethical Conduct20 Force Measure21 Changes22 Suspension Of Work23 Termination For Convenience24 Termination For Cause25 Effect Of Termination For Cause26. Indemnity27. Independent Contractor28. Subcontracting29. Assignment30. Governing Law And Jurisdiction31. Settlement Of Disputes32. Arbitration33. Communication And Notice34. General Provisions About the Author: The author of this article is Mr. Vijay Shelke who has more than 30 years of experience in Project Management, Construction Management, Contracts & Claim Management, Oil & Gas industry. To know more about the author please click here.