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.
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.
I think people are going to need a bit more information about the situation to be able to give you help with that question.
• Neptune Marine Service Ltd
Yup, will need more info before commenting on the clause.
Key items to consider:-
- Both parties will have this right.
- Notice period.
- Amount payable [fixed termination fees or actual documented cost].
• Regina Airport Authority Inc.
b. "Client" may terminate this Agreement for its convenience at any time upon providing 180 days written notice to the "Supplier". In such case, the "Supplier" shall be entitled to receive full compensation for all the services performed hereunder payment for all Work performed prior to the date of termination. Payment of such compensation is the sole and exclusive remedy of "Supplier" for termination of this Agreement by the "Client" hereunder and "Supplier" shall not be entitled to, and hereby waives, claims for lost profits and all other damages and expenses.
• AL Faris International Co. for General Contracting
We use below clause in our contracts:
"XXX may at any time and at its sole convenience, terminate this Contract, or any part of the WORK, by giving written notice to CONTRACTOR specifying the extent and the effective date of the termination ("Termination Date"). Should XXX terminate the Contract or any part of the WORK in accordance with clause x.x, CONTRACTOR shall immediately stop performance of the WORK, unless otherwise directed by XXX, and demobilize within XXX (XX) consecutive days. XXX shall pay CONTRACTOR all amounts properly due and payable for terminated WORK up to the Termination Date."
• GSPC Group
We use following clause for EPC Contracts of NG Pipeline Projects:
1. Termination for Owner's Convenience:
1.1. The Owner may at any time terminate the Contract either in whole or in part for any reason whatsoever by giving the Contractor a notice of termination specifying the extent to which performance of Work under the Contract is terminated and the date upon which such termination becomes effective. (Note: You can specify the period of Notice as per Contract Requirements)
1.2 Upon receipt of the notice of termination, the Contractor shall either immediately or upon the date specified in the notice of termination
a) cease all further work, except for such work as the Owner may specify in the notice of termination for the sole purpose of protecting that part of the Facilities already executed, or any work required to leave the Site in a clean and safe condition
b) Terminate all sub-contracts, except those to be assigned to the Owner pursuant to paragraph (d) (ii) below
c) Remove all Contractor's Equipment from the Site, repatriate the Contractor's and its Subcontractors' personnel from the Site, remove from the Site any wreckage, rubbish and debris of any kind, and leave the whole of the Site in a clean and safe condition
d) In addition, the Contractor as a condition of receiving the Payment specified in Sub-Clause 1.3, shall
i) Deliver to the Owner the parts of the Facilities executed by the Contractor up to the date of termination
ii) To the extent required by the Owner, execute all papers and take all other steps to the extent legally possible, which may be required to vest in Owner all rights, set-offs, benefits, title and interest of the Contractor to the Facilities and to the Plant and Equipment as of the date of termination to become the property of Owner and in and to subcontracts, purchase orders and other commitments entered into by Contractor for the benefit of the Project.
iii) Deliver to the Owner all non-proprietary drawings, specifications and other documents prepared by the Contractor or its Subcontractors as at the date of termination in connection with the Facilities and the Contract.
1.3 In the event of termination of the Contract under Sub-Clause 1.1, the Owner shall pay to the Contractor the following amounts:
a) The part of Contract Price, properly attributable to the parts of the Facilities executed by the Contractor as of the date of termination
b) The costs reasonably incurred by the Contractor in the removal of the Contractor's Equipment from the Site and in the repatriation of the Contractor's and its Subcontractors' personnel;
c) Any amounts to be paid by the Contractor to its Subcontractors in connection with the termination of any subcontracts, provided that Contract with the Sub-contractors was approved by the Owner prior to the appointment of the Sub-contractors;
d) Costs incurred by the Contractor in protecting the Facilities and leaving the Site in a clean and safe condition pursuant to paragraph (a) of Sub-Clause 1.2.
Hi Bruce - your post and the efforts of Tim, Paula, Christine and Andrew deserve more than zero responses, so here goes.
I do like how the paper encourages us to take a different mindset to the usual "here are our standard contract terms". It's also great that it helps us think about what are the crucial measures / outcomes that we need to think about - like uptime and the remedies. It's great to have some of these issues and risks highlighted so we can include better milestones and measures of success.
As a practitioner, and I've said it before in the forum, I do worry that there's some real thinking missing when I see some of these about whole of like costs involved with data transfer at the end of the contract. There's a lot of great programs that say they can repurpose and reformat the data, but I've found that there's still a lot of cost associated with that, and in the original approach to market, I've seen few demonstrate any real cost in their procurement plans. We can't expect the IACCM team to do it all though !
• Devant Limited
Hi, I've recently been negotiating on the Supplier side and have found that customer's want to pay a low price, benefit from the flexibility of SaaS pricing but then want to negotiate hard on every single detail! A particular challenge has been the demand from Customers to put every new release / update (however small) through extensive UAT. This clearly challenges the agile & flexible nature of SaaS and the one-to-all model. A number of SaaS suppliers are also relatively new and growing businesses - my experience is that many large corporates want to take advantage of this.
Thanks for preparing this paper as it articulates the challenges and benefits of 'as-a-service' well.