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Contract review

Contract review

Alan Tawse
22. Dec 2020 | 3 min read

Contract review

At this stage, the client will begin to compile the draft contract. Some of this will be in accordance with the information given when the tender package was issued to bidders, but will be added to using the bidder’s tender material including clarifications, qualifications and negotiations. The client may request fresh copies from the bidder of some material to be included in the final contract, e.g. a fresh cleaned-up copy of the final agreed pricing and discount schedule, or may present similar material to the bidder to confirm its accuracy. 

Subject to prior agreement and usually as part of the original tender instructions, it is also possible that some form of guarantees are required. This can take the form of a Parent Company Guarantee or a Bank Guarantee. If so, signed and stamped copies of these will now be required so that they can be included in the final contract document.

 

Draft review

Once the contract has been compiled, it will usually be sent to the bidder for review prior to signing. This is a key moment for the bidder, since it represents the chance to catch and correct any errors or omissions. This is when good record keeping is used to check that everything expected is included, and that changes agreed to during the clarification or negotiation phase have actually been implemented. It is not unusual to find that although something was agreed, it has not been implemented in the draft contract.

The bidder's tender support person or group will normally receive the contract document(s) in hard-copy or electronically and will arrange the distribution for internal review. Different portions will be copied and distributed to relevant persons, e.g. to the legal department, operations, finance, health and safety, etc. These persons will review the draft documents to ensure that they accurately reflect the offer made and any subsequent agreed changes.

The most difficult thing to spot is an omission – since by definition it isn't actually there, so a good process of cross-checking is important. Once all portions of the contract have been reviewed, any discrepancies can be forwarded to the client and updated documents issued. The updates also need to be reviewed and confirmed before the contract is ready for acceptance.

 

Final contract review

Once completed, the actual contract will be issued by the client ready for signature, usually in two copies, one for the client and one for the bidder (both considered originals). This however should also be checked by the bidder before signature to be sure that it is the same as the draft contract. This is the final chance to catch any errors or omissions.

It may also be required that all pages of both originals are to be initialled by both client and the successful bidder, in addition to signing and dating the relevant signature page(s). 

 

Signature date

Care should be taken to ensure that the signature page contains the relevant signature dates, as some contacts will refer to the start date as the date the contract was signed rather than a specific date in the calendar. The dates that the client and supplier sign may be different and it is not uncommon that a contract signing is treated as a ceremonial occasion and the relevant parties focus on adding their signatures, leaving the space for the date blank.

 

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Alan Tawse

Alan Tawse

Alan has worked in the oil and gas industry since 1974 in various administrative, operational and managerial roles in the UK, Netherlands and Norway. In 1993 he joined Halliburton in Norway as country manager of their new Drilling Systems division. Following a merger with Dresser industries in 1998, he moved to Business Development where he established a BD support team providing centralised expertise for tendering, contract management, market intelligence and various BD software systems. After managing up to 200 tenders and proposals annually for over 20 years, Alan retired at the beginning of 2020 with plans to explore Norway, and spend time with family overseas, He enjoys downhill skiing in the winter, golfing in the summer and following the Formula 1 racing season throughout the year.

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