Contract management is important to (1) ensure projects are delivered as planned, (2) manage scope, cost, schedule, risks, and opportunities, and (3) create value for all stakeholders. Key aspects of contract management include formulation, administration, execution, and dispute resolution. During administration, teams monitor contractual obligations, ensure compliance, and manage changes and risks to meet project objectives. Effective contract management requires a systematic process and proactive legal support throughout the project lifecycle.

1. Contract Management Pankaj K Sinha

2. Why Contract Management ? Ensure Project Delivery as planned Manage Scope, Cost and Schedule Manage Risks and Opportunities Close Contract Create Value for all Stakeholders

3. Contracts in ESSAR Contract (In-house Projects) Process License Software License EPC PMC Engineering Procurement Construction Transportation Contracts (External Projects) Strategic Relationship e.g. MOU/Consortium/JV/SPV EPC EPCI BOT Process/Software Licences Subcontract (Construction, engineering, consultancy) Typical Contract Structure Contract Agreement SCC GCC Scope Cost Schedule Acceptance Tests LD and Liability Others

4. Strategy- Keep It Smart and Simple Formulate Administer (Risk and Mitigation) Execute Formulate Administer

5. Murphy’s Law Everything that can go wrong will, therefore, plan for it beforehand. Contract Administration process helps the Stakeholders through the project life cycle to manage Risks and Opportunities to create Value.

6. Typical Risks Team Formation Communication (Voice and data) Synergy of Engineering/Procurement/Construction Delivery of Long Lead Items LD and Liability Subsurface conditions Social Factors HSE Contract Terms and Conditions Ineffective Change Management System Fund Management

7. Contract Formulation (In-house Projects) Create Team of Stakeholders Representatives (Owner, Entities from PBG and Functional Specialists) Provide copies of Feasibility Study. Conduct Risk Workshop for risk identification and equitable risk distribution within Group entities. Finalize Execution Strategy for optimum tax structure and to map risk mitigation measures, scope & schedule from Feasibility Study. Finalize Terms Sheet for attractive proposal to Financial Institution and optimum contracting structure Use industry popular formats with customization e.g. World Bank, FIDIC with stand alone attachments for Scope, payment, schedule , acceptance tests etc. Optimize exposure for default provisions and exist routes. Continuous dialogue and finalize Contract. Execute Contract and distribute scanned copies. Week 1 Week 2 Week 3 Week 4 Week 0 Proposed saving of time- more than 100% without any additional resources Proposed Implementation time- Two weeks

8. Contract Formulation (External Projects) Create Bidding Team (along with Functional Specialists) Review Tender Document/Proposal/ Strategic interests (for JV/Consortium) Conduct Risk Workshop, identify risks (Quantitative and qualitative) and mitigation measures to acceptable limits Bid/no bid decision and finalize Execution Strategy Optimum and equitable Risk distribution within Bidding entity, Client and Subcontractor Raise Deviation and resolution with Client/Vendor/Service Provider Submit proposal and finalize Contract Execute Contract File original Contract and distribute scanned copies. Week 0 Week 2 Week 0 As per Client’s requirement Proposed Implementation time- Two weeks.

9. Contract Administration Charter Team and organize Kick Off Meeting Conduct Risk Workshop , develop Risk Register and update monthly. Develop Contract Compliance Matrix, Execution Plan and Change Management and Document Control System Monitor and mange Contractual deliverables by Stakeholders. Ensure compliance and synergy of deliverables by Stakeholders to meet Project objectives Manage Subcontracts Review and drafting of correspondence. Dispute resolution with Subcontractors/Vendors/Client. Seek Management endorsements and approvals. Close out of Contract. Proposed Implementation time- Two to four weeks No additional resources.

10. Dispute Resolution Proposed Implementation time without any additional resources Contract Repository- Two to four weeks. Proactive association of Legal for maximum realisation of value: Continued involvement of Legal Counsels as continued support to Project Team throughout the life cycle of the Project. Contract Repository- Custodian of copies of all Contract documents. Proactive support by review of contractual correspondence within demanding project environment. Support Contract Administrator for Claim documentation. Proactive support for Notices, ADR, Arbitration etc. Leading activities for Arbitration, Litigation throughout the Project Lifecycle.

11. Consider PMBOOK Framework

12. FIDIC Red Book Provisions General Provisions The Employer The Engineer The Contractor Nominated Subcontractors Staff and Labour Plant, Materials and Workmanship Commencement Delays and Suspension Tests on Completion Employer's Taking Over Defects Liability Measurement and Evaluation Variations and Adjustments Contract Price and Payment Termination by Employer Suspension and Termination by Contractor Risk and Responsibility Insurance Force Majeure Claims, Disputes and Arbitration Typical Sequence of Dispute Events Envisaged in Clause 20

13. Typical Contract Management System Primavera & SAP Primavera Expedition SAP SAP, Marian, Expedition, Primavera Icarus Knowledge & Decisions Information IT Infrastructure Servers & Network Data Documents Procurement Contract Management System

14. Thank You Q & A