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Contents Page References WA3 Introduction and objectives 44 Resumé 1/4I6 Topic | Introduction wary 1 General 7 2 Reasons for contracting out 8 3° What is a contract 9 4 Biffective contracting 10 5 The contracting process u 6 The cender board 2 Topic 2. The preparation phase VANS 1 Initial preparations B 2 Contract strategy 145 2.1 Major decisions 4 2.2. Contracts and sub-contracts 14 2.3. Types of contract 16 2.4 Incentives 7 2.5 Milestones 20 3 Definition of the contract scope of work al Topic 3 Going out co tender 4123 1 ‘Types of tender 23 2 Preliminary enquiry 24 3. Pre-qualification 24 A The invitation co eender 25 Topic 4 Contract award 4136 1 Receipt of tenders 36 2 Evaluation of renders 36 3 Letters of intents 37 4 Award of contract 37 ‘Topic 5 ‘The contract documents 1/4138 1 The document 38 2 Pare 1 - The Form of Agreement 39 3. Part 2 - The Conditions of Contract 40 4 Part 3 ~The Scope of Work 49 5 Part 4 - Contractor's Execution Plan 51 6 Part 5 - Provisions by Contractor 51 7 Pare 6 - Provisions by Company 52 8 Part 7 - Standards 52 1 WDIP- Contract management Poge 174/1 v2.00 9 Part 8 - Drawings 53 10 Pare 9 - The Schedule of Prices and Rates 34 11 Pare 10 - Administration Procedures 54 12 Pare 11 - The Performance Guarantee 56 13. Parc 12 - The Performance Bond 56 Appendix I Letter of Tender 114/57 Appendix 2 Conditions of Tender 14159 Appendix 3 Form VII - Technical information 1/4162 Appendix 4 Form of Agreement 14/68 Appendix 5 Concents list of Part 3 - The Scope of Work - of a drilling contract 14/7 Appendix 6 The Scope of Work of a drilling contract wArna ‘Appendix 7 Contents list of Part 3 - The Scope of Work - of a services contrac 114176 Appendix 8 The Scope of Work of a services contract 1Am79 Appendix 9 Part 9 - The Schedule of Prices and Rates (from a drilling concract) 14/81 Questions 14193 Page 1/4/2 A WOIP - Coniract management v2.00 References Guidelines for Use of Standard Prequalification, Invitation co Tender and Contract Documents for Drilling and Drilling-Related Services SIPM EPO/S1, The Hague Revision: June 1990 Improving Drilling/Well Construction Performance chrough Better Contracting Rushmore Associates SIPM-EP, Drilling Engineering Conference, 1994 Shell's “Drilling in the Nineties” A Guide for Contractors SIPM EP91-0740 March 1991 Commercial Contracting Guidelines SIPM FN/05 November 1993 WDLP - Contact management Page 1/4/3 v2.00 Introduction and objectives This Pare is intended to give guidance on key aspects of contracting by providing an overview of the various types of contract and contracting activities. Ie also highlights some of the PRE-QUALIFICATION In order ¢o ensure that contracts are placed only with contractors of known integrity, ade- quate financial standing, acceptable HSE performance and proven workmanship, SIEP and OUs have procedures in place for the appraisal and approval of contractors. A standard Pre- qualification document called: “Standard Pre-qualification to Tencler Document for Drilling, and Drilling Related Services” is available from CPS-EP and is used to record the Commercial, Technical and Experience information necessary for the pre-qualification of con- tractors. Guidelines for the evaluation of contractors on the basis of chis information can be found in the document called: "Guidelines for use of Standard Pre-qualification, Invitation to Tender and Contract Documents for Drilling and Drilling Related Services” also available feom CPS-EP.

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