Project Management in the Oil and Gas Industry

6.1 Introduction
The contract is considered the backbone of any project. A contract with 
any and all parties is essential and vital.
The contract is an important factor for the success or failure of any proj-
ect, depending on whether the contract has an impact on the behavior of 
the service provider and on your ability with your team to overcome the 
gaps in the contract. In this chapter we will clarify the types of contracts 
and tenders and the advantages and disadvantages of each type so that you 
can choose the best.
The most common case, in real business, is that you may have worked 
in the same place for a long time for a company that has a long presence 
in the market, which makes you feel that you will go through the tender 
and contracts procedures the same as your predecessors. You may move in 
their footsteps in preparing the contracts with the same ideas, but you will 
arrive at the same point that they did.
6
Tendering, Bidding, and 
Contract Traps

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Project Management in the Oil and Gas Industry
To be successful in your administrative activity you should think in 
the way that contracts were executed and how to resolve the gaps in these 
contacts. This can be identified after looking at the contractors that are 
working with you, reviewing their performance, and considering enhance-
ments in their performance by changing the tender or contract procedures.
At the end of the close out reports of the project, which must be 
characterized by clarity and transparency so as to gain a benefit from 
previous projects, you should know the points of strengths and weak-
nesses, which lets you change your strategies in dealing with the various 
service providers until you reach a point of success that has not been 
reached before.
There has been great development in recent times at the global level in 
the fields of transportation and communication, which has had the greatest 
impact on the development of the industry where the ease and speed of 
communication and movement between countries and continents eventu-
ally lead to the free movement of trade.
Free trade between nations and between different continents has led to 
a fierce competition between all companies and international organizations 
that want to impose their control over global markets. Therefore, everyone 
tries to make products or services more unique than other competitors 
and, as a result of the intense competition strategies, become special in 
dealing with other firms.
The owner of the project may have a lot of offers from different 
countries. Therefore, the decision-making in a scientific manner is very 
important and, in most cases, there is a long distance between the client 
location and contractor engineering office or factory. This has led to the 
need for a system to guarantee the client’s confidence in the product or 
service. This system is the ISO discussed previously. On the other hand, a 
good conclusion in the contract is one of the guarantees that will bring you 
assurance in the product quality while achieving the right price in a timely 
manner. Using a FIDIC contract will help with the success of the project 
and will help you achieve your goals.