Question:
Practitioner Corporate Award
Assessment Code: PDC
This assessment tests the learning outcomes and module content of:
Module: Developing Contracts in Procurement and Supply
Task
Using a set of your organisations (or one with which you are familiar) terms and conditions, explain how the terms and conditions help the organisation ensure that:
- The risks of poor quality, extension of time, increased costs and unethical practice are managed effectively
- The relevant performance measures are monitored and managed.
You should use a full set of terms which includes appropriate schedule content and relevant appendices.
Outline the concept of the “battle of the forms” and explain how you could ensure that any agreement is carried out under the organisation’s own terms and conditions.
Guidance for candidates Your work should consist of 3,000 words.
Table of Contents
3.0 ADNOC Procurement & Supply Department Terms and Conditions Overview.. 7
4.0 Relevance of the ADNOC Terms and Conditions. 9
4.1 Ensuring Relevant Performance Measures are Monitored and Managed. 9
5.0 The Battle of the Forms. 13
5.1 Concept of the Battle of the Forms. 13
5.2 Suggested Approaches of Mitigating the Battle of the Forms. 14
5.2.1 Traditional Approach. 14
5.2.2 Lord Denning’s Approach. 14
Appendix 1: ADNOC Terms and Conditions. 19
Appendix 3: Miscellaneous Terms and Conditions. 26
Executive Summary
The assessment has focused on evaluating the relevance of the terms and conditions in the development of contracts for procurement and supply. In particular, the evaluation has been anchored on the extent to which the terms and conditions ensure successful mitigation of the risk of poor quality, time extensions, increasing costs and management of unethical practices. Also, the best practice in the improvement of performance measures in the contracting through a focus on terms and conditions being evaluated.
From the analysis and findings, it has been noted that ADNOC adopt terms and conditions to ensure that they withstand the prevailing complexities and challenges of personnel, indemnity and insurance, confidentiality, performance bond/retention, intellectual property rights, payment and invoicing, suspension of work among others synonymous with their practices. Also, part of the findings included the different terms and conditions that are found in the procurement and supply department which are all critical for their success in their area of operation. The relevance of this has been improved cost management and improvement of their financial and operational performances.
For the recommendations, this assessment has recommended ADNOC to be cognizant of lessons learned from the management processes and procedures adopted in the contract and their subsequent future implementations. Further, they ought to maintain elaborated records of the extent in which involved parties could adhere to the already set terms and conditions for ensuring any subsequent claims that might surface is countered efficiently. This can be attained by the organisation contract management team which is tasked with setting out elaborate guidelines and responsibilities to all involved players in a contract and particularly integrating relevant team practices and communication.
Lastly, the “battle of the forms” has been identified as a distinct phenomenon in a contract evidenced from the failure of agreeing to individual terms and reluctance in the implementation of an agreement in line with the other identified recommendations. This assessment has recommended that the best practice in solving the battle of the forms is through the adoption of a traditional approach that has a potential of encouraging ADNOC to insist on their position with expectations that their competitors would revert their hardline position. Also, the Lord Denning’s approach has been recommended to be used as a reassurance that all the included parties are integrated into a standard agreement anchored on prevailing laws of contracts.
1.0 Introduction
The objective of the current study assessment would be on evaluating the role of terms and conditions in guiding an organisation in the management of the risks of: poor quality, time extension, increased costs and unethical practices. This is in line with CIPS (2016) which has noted that the primary aim in developing terms and conditions is ensuring that an issued tender is attractive to their targeted market and characterized by adequate and unambiguous terms and expectations for all the engaged parties. In order to attain their intended role, Cox (2001) argued that terms and conditions must be flexible, accessible, transparent, consistent and tailored to the expected outcomes. In such a situation, the anticipated outcomes from the terms and conditions would include mitigation of the risks of poor quality, time extensions, increased costs and unethical practices.
In regard to the current study scope, the case study company used is Abu Dhabi National Oil Company (ADNOC). The author area of placement is in the procurement and supply department and involved in implementation of the contracts that majorly involve selection of the potential suppliers, consistent tracking of the prequalification statuses online and the contract invitation of all the potential suppliers. In this study, part of the research would include an evaluation of the different importance of the performance measures in monitoring and management has been evaluated in-depth. Also, a detailed review of the battle of the forms concept has been carried out for explaining the extent to which they can actively be used in facilitating an agreement within the limit of entity terms. The battle of the forms identifies the uncommon occurrences prevalent in an event a single business form makes an offer in terms of preprinted forms of contracts. According to Macaulay (2018), this is in a situation where two companies actively engage in the negotiation of contract terms with individual parties interested in the contracting based on their set terms.
ADNOC is a world-leading energy producer established in 1971. It is headquartered in the city of Abu Dhabi in the United Arab Emirates (UAE). Its operations are anchored in the overall hydrocarbon value chain through a network of fully-integrated businesses with diverse interests ranging from exploration, production, storage, refining and distribution of a wide range of petrochemical products. The company objectives are creating improved efficiencies through benchmark performance, integrating a balanced scorecard approach in the entire group and aligning with their key performance indicators (KPIs). The company vision is working collaboratively in harnessing energy resources for the benefit of the nation. Similarly, their mission is operating through partnership, innovation and a relentless focus on high performance and efficiency in maximising value from these finite resources.