Contract Training Class I

Contract Review and Approval Process

This course will consist of three classes Class 1: Contract review and approval

process Class 2: Managing Projects to the Prime

Contract Class 3: Selecting, Issuing, and

Managing Sub-Contracts, Work Orders and Purchase Orders

The Contract Review Process Two Categories▪ Our Prime Contracts▪ Our Sub Contracts

PRIME CONTRACTS

Contracts All Values

Prime Contracts General Procedures▪ Contract received by the coordinator▪ Enter into tracking log▪ Make a review copy▪ Attach a review tracking sheet▪ Attach a project manager review sheet▪ Turn over to Project or Service Manager for review

Contracts Less than 1 Million Dollars

Project Manager Review contract using the Project Manager Review

Sheet and answer the questions. Make a copy of the contract for the superintendent

or supervisor that will manage the contract. ▪ Be sure to remove dollar values before issuing the

contract. ▪ Be sure to include the project manager review sheet

Contracts under 1 million dollars▪ Date and Initial the Contract Review Tracking Sheet▪ Turn over contract with all documents to the VP of

Operations or the Director of Service for review and approval

VP of Operations or Director of Service will fill out the contract summary sheet and will 1. Recommend for signing and give to the President for

signing 2. Return to Project or Service Manager for action items

The President will sign and return to the coordinator for filing and return mail.

The Coordinator will ensure the superintendent or Service Tech receives a copy of the executed contract with review sheets.

Ensure the contract values are removed from the field copies.

EXCEPTIONS: 1. Contracts which are Guaranteed

Maximum Price 2. Contracts involving Solar or Wind

installations

Both of these types of contracts are to be treated as if they are contracts of 1 million dollars or greater regardless of the contract price.

Contracts 1 Million Dollars or Greater

Project Manager Review the contract using the Project

Manager Review Sheet and answer all questions

Initial the Contract review tracking sheet Turn over the contract and all documents

to the Director of Education and Loss Prevention

Director of Education and Loss Prevention Make a copy of the Project Manager Review Sheet and a

copy of the scope of work section and give to the Vice President of Preconstruction

Make a copy of the contract without prices for the Project Superintendent

Make a copy of the Guaranteed Maximum Price sections and a copy of the review sheet and give to the Vice President of Finance

Schedule a contract review meeting within 3 days with the Project Manager, VP of Operations or Director of Service, the Project Coordinator and the Project Superintendent. ▪ Send all parties their copies for review in advance of the meeting▪ All parties need to review their copies prior to the meeting and be

prepared to discuss the contract at the meeting

Review Meeting

Chaired by the Director of Education and Loss Prevention The Project Coordinator will complete meeting

minutes and distribute after the meeting Agenda▪ Overview of Contract: Director of Education and Loss

Prevention▪ Potential Risks and Mitigations: Director of Education and

Loss Prevention▪ Financial Risks and Requirements: VP of Finance▪ Work Scope Risks and Mitigations: Project Manager and VP

of Preconstruction▪ Assignment of Action Items and Determination of Deadlines

and Follow Up: Project Manager

Post Review Meeting Outlook tasks with deadlines will be sent by

the coordinator for all action items The project manager will negotiate any

items needed as determined in the meeting The project manager will document

conversations and agreements Upon completion of all action items and

negotiations, all paperwork will be turned over to the project coordinator.

The Project Coordinator will put together a completed contract version ready for signature This will also include the review copies,

notes and review sheets This should also include signature

highlights

The project coordinator will give the final contract version to the Director of Education and Loss Prevention

The Director of Education and Loss Prevention will review the final version, ensure all action items are completed, complete the contact summary sheet and place on top of the contract.

The Director of Education and Loss Prevention will: 1. Recommend Signing and give to the President for

Execution 2. Return to the Project Manager for further Action

The President will sign and give to the coordinator for filing and return mailing.

SUBCONTRACTS, POs, and WORK ORDERS

SUBCONTRACTS AND VENDORS

PLEASE KEEP TWO THINGS AT THE FOREFRONT OF YOUR THOUGHTS 1. Everyone in our industry attempts to

push all liability to us. 2. The Customer is Always Right……AND

when it comes to subcontracts and POs……WE ARE THE CUSTOMER

Subcontract Process

Subcontractor Approval and Pre-qual Process All new sub contractors are to be sent the following:

▪ Pre-qual Package▪ Copy of our template sub-contract

▪ Be sure to include the correct type of sub contract.

The pre-qual package is to be returned to the Preconstruction Coordinator▪ The Preconstruction Coordinator will refer the pre-qual package to the Director of

Education and Loss Prevention for review of safety and approval after checking credit references and EMRs.

▪ The Preconstruction Coordinator will refer the pre-qual package to the VP of Finance for review and approval of financial stability

▪ The preconstruction Coordinator will refer the reviewed package to the VP of Preconstruction for a reference check and final approval. The VP of Preconstruction will notify the manager if the contractor is not approved.

▪ The preconstruction coordinator will enter safety record into database and add approved contractors to the approved contractors list and notify the Manager that the subcontractor has been approved.

▪ The Preconstruction Coordinator will forward the completed package to the Accounting Manager for filing and vendor set up in accounting system

SubContract, Work Order or Purchase Order

Subcontracts valued at less than 10,000 dollars do not need to be pre-qualed and can be issued a simplified subcontract in lieu of the standard subcontract.

Work orders are issued in lieu of a subcontract if we have a master sub contract with the contractor. Our intent is to establish master sub contracts

with as many contractors as possible if we intend to do more than one project with the subcontractor.

Purchase orders are only issued to material suppliers. If labor is involved, use a subcontract or work order New vendors: We will need a new vendor

request and the request and W-9 sent to Angela. We DO NOT ACCEPT other companies PO terms

and conditions Federal Projects: When issuing the

subcontract or work order template, be sure to issue all pertinent exhibits for the project

Types of Sub Contracts Standard▪ The default contract

Simplified▪ For contracts less than 10K dollars only

Design only▪ For designers and engineers only

Labor or Equipment Only▪ For labor providers such as Aerotech or

equipment providers such as equipment rentals or cranes only

Letter of Intent, Notice to Proceed If work needs to begin on a project before the

contract process can be completed a Letter of Intent and Notice to Proceed to can be issued▪ These need to be limited in dollar amount▪ These need a clear limit and definition of scope▪ Must have attached to them the subcontract which will be

executed (At least the template)▪ Must be signed by the contractor before work begins and

we need insurance certificates before work begins May be signed by President, VP of Operations or

Director of Education and Loss Prevention before being sent to the contractor.

Reviewing the Contract Refer to the Review Packet you were

given 1. Contract Review Checklist 2. Project Manager Review Checklist 3. Contract Summary Sheet

Lets do a quick contract review using the Project Mangers Contract Review Check List and the Sample Contract Supplied in Groups and then we will go over as a class.

Summary

The contract is the agreement that the entire project will be managed by. We need to ensure that everyone that is involved in the supervision of the project understands the contract.