CONTRACTING AND ASSASSINATED PIPE



by Joseph Habr







It was hilarious. However, I did not know whether to laugh or cry.


I was reviewing an 80 Million US$ contract and there, in the technical section, was a clause calling on the service contractor to provide client with "assassinated pipe upon request." Contractor had accepted all terms and conditions.


Other sections of this service contract were not much better, although less dramatic. Through cut-and-paste, a couple of hundred pages contract was put together, lots of its sections irrelevant, some relating to a pure supply transaction while others dealt with different weather and environmental conditions that relate to a different territory of operations.


And the contractor is damned to sign such a contract or ask for corrections and risk "pissing off" the client.


Executing a contract is a whole different ball game, having spent days and weeks discussing and finalizing issues at hand.


Lots of times, especially if the client is the government, the contracting department is in minimal connection with the end user. Each has its own requests, needs and rules. Most important, each has its own ego and the contractor ends up being confused on whom to answer to: the end user who will sign off upon completion or the contracting body who will pay for the work.


I have been in situations where the end user had requested changes and delays to the work being done, providing the written requests for such actions, only to see the contracting team penalizing the contractor for such delays and refusing to pay for any variations.


This is a no-win situation.


Even worst, some contractors have presented offers with up-to-date equipment against obsolete material requested in the tender documents. The contract was signed for the execution of works as per the contractor offer, letter of acceptance issued from the end user after trial period, only to see the contracting team refuse to pay. Their excuse was that delivery was not as per tender documents, even though contract says clearly that all work is to be done as per contractor offer.


Again, a no-win situation.


In the third world, egos count. Contracts are secondary.