SAJJAD KHUDHUR ABBASCeo , Founder & Head of SHacademyChemical Engineering , Al-Muthanna University, IraqOil & Gas Safety and Health Professional – OSHACADEMYTrainer of Trainers (TOT) - Canadian Center of Human Development

Episode 28 : Project Management Contract

• most important document for the execution of a project.• project management - know very well, includes all important

issues regarding supply and services- Fulfillment of requirements, review the contractual

situation, to claim the respective extra costs• project engineers :

- mastered the fundamental aspects of the contractual arrangements for negotiated with subcontractor

- depends on the relevant information of the team members.

• actual contract arrangement - trained and experienced traders and lawyers

• Fédération Internationale des Ing é-nieurs - Conseils ” (FIDIC)- take equally into account the interests of Conditions of

Contract for Works of Civil Engineering and Construction Conditions of Contract for Electrical an Mechanical Works

• jus strictum (binding law) and jus dispositivum (modifiable law).

• contractual terms defined in detailed schedule to avoid disputes• 2 parties involved:

• Employer called customer by the plant manufacturer, is usually future plant operator

• Engineer appointed employee chosen by employer (customer) to show interest towards contractor

• Contractor plant manufacturer; project manager as a representative

COMPANY ABC:Referred as an employer

COMPANY XYZ:Referred as contractor

• Typical wording:

Excluding the delivery conditions of the contractor, the following documents will apply to the present contract exclusively in the following order:The terms and conditions of this contract, its appendices and its possible amendments.The General Terms and Conditions of the employer The quotation of the contractor from 11/11/2002

• General terms and conditions of the plant manufacturer are excluded for the time being- at this point legal matters with probably far - reaching

consequences are frequently addressed• The wording “ apply exclusively in the following order ”

determines the hierarchy of the documents.

• It is difficult for the contractor to fulfill all the requirements of such a listing contradictions within the listed requirements are possible

• For safety, the employer can insert the following contract clause:

In case of contradictions in this contract or contradictions between this order and the

provisions mentioned above, the more extensive provision shall prevail.

• To prevent the contractor ’ s deployment of inadequately qualified and constantly fluctuating staff:

Employer:Provide an organization chart:

-denominating all responsible employees involved in the projectReserves the right to reject the appointment of the project manager:

- based on good cause

have relevant experience and the respective qualificationsPerson/ Employee:

has to appoint a project manager who will be entrusted with the coordination until the complete fulfillment of the order

If the contractor intends to make changes in staff :- shall be coordinated with the employer

Contractor:

• an individual or a business that signs a contract to perform part or all of the obligations of another's contract

• Plant manufacturer responsible for the fulfillment of thetechnical requirements of the project:– claim extra costs– reject the warranty for the respective components

• Operator only has the possibility to limit the selection• In practice:

– Operators may reserve rights to participate in technical part of contract negotiation with sub-suppliers

– If demand going beyond specification, project engineerhas to point out this fact and communicate to

project management respective supplementary offer can be prepared

Precisely defined

Additional demand and stipulations: Contractors• prepares minutes of all meetings

with the employer.• prepares copies of all technical correspondence as well as of the

technical part of the minutes of meetings with his subcontractors.• provides a monthly progress report.• employer will be provided monthly with the updated project

schedule.

GOOD CONTRACTS Clearly stipulated

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