Hello Lamija, I have encountered this situation numerous times (in an industry other than the one I am in currently). My approach to this, usually with success, was to define a clause wherein the distributor is given a very clear revenue/sales goal for a defined period of time (say, 6 months to one year) during which we would not grant exclusivity, nor would we actively seek another distributor. If the distributor met the clearly defined objectives, we would then negotiate an exclusive arrangement. Many factors contribute to this scenario, however, such as the relative size of the market, the number (or lack) of distributors in the sector, the risk associated with "betting" on a single player, cultural social/considerations, etc.
In short, exclusivity based on proven performance. I hope that proves helpful.
I have not used Open Book contracts, but as I understand open concept is applied to cost part. The contractor will share real cost with owner and get certain agreed profit margin over it. The contractor is not promising to do cheapest. Same time the performance obligation is not dropped, and contractor is required to provide the quality and warranty, if applicable. Open book would not imply cheapest at no performance assurance.
• Air Liquide
Thank you for your contribution.
To go further, the Contractor is compensated according to the number of working hours, time an hourly rate. The hourly rate depends upon the country of origin of the employee.
The contractual manning plan specifies the country of origin, and therefore the rate.
However, it happens that the actual country of origin may be different than the one specified in the contract
The question is:
Knowing that we have an "Open Book" contract, does the contractor has an obligation to invoice with the rate as per the contract's country of origin rate, or according to the actual country of origin rate?
As illustration, the contract mentions a project manager coming from France, whereas he actually comes from China. Which rate shall be used?
Thank you in advance
• ExxonMobil Nigeria
In response to your latest post, I think in order to avoid any form of dispute or confusion, there has to be a revision/addendum to the contract to explicitly state the rates for different nationals.
I currently work on some contracts, not Open Book though but similar in scope and price structure to what you mentioned. In them, we have rates for Western expats, non- western expats and locals.
This makes it extremely easy for our contrcators to apply the right rate per personnel deployed for the service.
I hope this helps.
• Ministry of Defence
As said Open Book can have various interpretations. Commonly it means access to a supplier's financial information used for pricing.
I am a little surprised about the comment, presumably regarding the nationality of the Project Manager, either French or Chinese? I would have thought the ability of the individual is more important than the nationality and the contract would be priced on that basis? i.e. the services of a professional Project Manager.
• Air Liquide
You are correct, competence should prevail on Nationality (and then cost), but the client always want to get the cheapest, presuming that the competency is identical, which is clearly not always true.
• Legal and Commercial Training Limited
It is worrying to read that both parties have their own definition of "Open Book". There will be one contract between the parties and the term "Open Book" must be clearly and precisely defined.
New International Technology Co.
Institute of Business Ethics www.ibe.org.uk/ International Labour Organization on child labour www.ilo.org/ipec/lang-en/index.htm Ethical Trading Initiative www.ethicaltrade.org/ UN initiative for businesses who want to align their operations with ethical practices www.unglobalcompact.org/
In the UK, varies by location in the country. Outside of London 350 for CM practitioner, to 600 in the city.
• Nokia Networks
Hi Pippa, thank you for your response. just for clarity: we talk about 350 GBP per day (~8h), 600 GBP per day in London?
to me, this seems rather low. is this adminstrational work? I mean, no negotiation responsibility. no conceptional work?
• Ministry of Defence
There is an old saying about paying low salaries.
Maybe treat this like any other requirement and make it a competition to drive out the best available market rates. I suggest the big consultancy companies are likely to be higher than £600 a day. it could easily be triple this amount.
Get a tender out, and open it to smaller companies or individuals?
We have moved some of our Procurement & Construction projects from progress based payment to milestone based payments. The major reason was to motivate contractors to expedite milestone achievement, and get paid faster. However, we found that most of the time delay had come from owner, consultant, designer or suppliers (not under contractor). In those cases, contractor resisted to get paid nothing, for not their mistake. We had to amend few contracts to move back to progress payments, or we had to breakdown milestones into smaller units. For few projects, it went smooth and milestone payment were successful. So you may have to see what you can offer and what are your limitations, before introducing this change. A survey feedback from your routine contractors can also be helpful in decision making.