Management
of
CONTRACTS
&
PROCUREMENT
Health Safety and Environment
Community
CONSEQUENCES
Security OF
RISK
Conformance/ Compliance
Economic
Health Safety and Environment
Community
CONSEQUENCE
Security OF
RISK
Conformance/ Compliance
Economic
Health Safety and Environment Conformance/ Compliance
-Reversible (First Aid), confined near source -Non-compliance to procedures
-Lost Time Injury -License revoked
-Long Term, multiple fatalities -Regulatory action
Community Economic
-Community complaints, loss of reputation -CAPEX & OPEX
-Public Exposures: NGOs, international media -Schedule
-Production Volume
-Revenue
Security
-Violation of Procedure
-Criminal Offence
-Multiple Fatalities and Evacuation
CONTRACTS
& PO
ADMINISTRATION MANAGEMENT
RISK
MATERIALS
VENDOR MANAGEMENT
MANAGEMENT &
LOGISTICS
Critical clauses not defined
Absence of sufficient standard terms and conditions
Scope of works and deliverables not clear
Schedule of rates and break up of equipment and
manpower not available
Absence of clarity in contractor’s claim
Invoicing discrepancies
Delay in execution of work and renewal of the contract
Changing vendors to least priced without
consideration to Total Cost of Ownership
Many vendors with petty orders. Huge database.
No specialization
Rejection, delay in delivery and no delivery
Vendor put owner under stop credit
Vendor generates exceptions to owner’s terms and
conditions
Non conformance to owner’s policies and procedures
Delay in processing purchase requisition
RFQ not detailed for techno-commercial terms
Lack of competitive bidding and cost savings.
Insufficient justification while placing orders
Lack of clarity in technical specifications , part
number and other technical information
Lack of clarity in commercial instructions
PO doesn’t cover legislative requirements
Critical terms not defined in PO or GTC
Incomplete Material Catalog/ Material Master.
Duplication of Material Groups and Codes
Material criticality not provided in the system
Inventory min/max & re-order data misleading.
Consumption,lead-time,payment delays not captured.
Major consumables not reviewed for consumption
and expediting
Inconsistent expediting and follow-up for deliveries.
Lack of regulatory compliances in logistics
Absence of prompt administration of logistics contract
CAPEX, OPEX, Revenue, Schedule, Production Vol
Rejection & lack of confidence among user
Delay in contract execution
Legal issues
Loss of integrity and non performance
Lack of control and ambiguity
Negative on HSE, Community, Security and
Compliances
Contract Templates: Work Order, Service Order, Purchase
Order, Consultancy Agreements. Bank Guarantees, Non
Disclosure Agreement
General and Particular Terms and Conditions
Tendering. Term Agreements (Fixed Price Agreements)
Contract administration, amendment, renewal, closure,
final settlement of claims
Payment priorities, Balance. Advance payment, Retention
Additional payment, Provisional payment
SOP and Process Flow Charts
Expressions of Interest, Vendor Pre-Qualification, Factory
Visit
Vendor SWOT Analysis
Trail Order
Setting credit limits and credit period
Performance evaluation
Vendor database
SOP and Process Flow Charts
Check List for release of PO
Note for Approval and Authorization Matrix
Post PO activities: Expediting, Payments, Documentation,
Closure
Purchase Order and Purchase to Pay processing cycle time
Total Cost of Ownership and Savings
Purchase Requisition Consolidation
Pending PR report
Open PO report
Expediting report
Payment priority report
Rejection report
Maintenance, shutdown, critical material status report
Cost Savings achievements against target
Chronology of contractual documents
Weekly, Monthly and Annual reports
