Project Management in the Oil and Gas Industry
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2.Project management in the oil and gas industry 2016
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6.2 Contracts
Contracts are one of the most important aspects in the construction indus- try where the relationships between the three parties are intertwined, as shown in Figure 6.1. From this figure, one can conclude that there are two main contracts between the owner and the engineer and also with the contracts. On the Tendering, Bidding, and Contract Traps 185 other side, the engineering firm or the contractors also have contracts to supply materials or provide services or subcontractors, and all these con- tracts will affect the project as a whole. Therefore, the implementation of the project as a whole, in general, is linked to those contracts. For example, the services for an engineering firm stem from a company that maintains their computers. When there is no binding contract to achieve a fast response and quality in service of main- taining the computers, this will have a negative effect on the overall design time, which respectively affects the time of the final project or quality of the project. Therefore, any contract from any party has an impact on the whole project and a contract with the supplier of materials for the contractor is very critical, as any error will have a negative impact directly on the project time as a whole. All contracts are important to the project and the goal of each contract should be clear to all. The most risky contracts are the most important because they have the highest financial value in the whole project, which is the construction contract between the owner and the construction main contractor. The owner must determine the type of contract, how each contract is different depending on the nature of the project, and its objective. There are many Figure 6.1 Contracts inside the project. Owner Contractor Engineering firm Supplier Services Supplier Services |
