JLX-PR-33.00 Contractors Management Procedure

Document No: PR.33.
00
Publishing Date: 18.01.2023
Contractors Management Procedure
Revision Date:
Page No: 1/9
Revision No Revision Date Revision Description Prepared by
0 Initial document preparation Fahmi A.Taha/QHSE Manager
01
02
03
Prepared by: Approved by:
Fahmi A.Taha/QHSE Manager Suliman Badour/ Country Manager
© Optimum Drilling Services 2017. All rights reserved. uncontrolled document when printed or transmitted electronically
Document No: PR.33.00
Revision Date:
Page No: 2/9
TABLE OF CONTENTS
PURPOSE ................................................................................................................................................................. 3
SCOPE ...................................................................................................................................................................... 3
DEFINITIONS AND ABBREVIATIONS .................................................................................................................... 3
RESPONSIBILITIES ................................................................................................................................................. 3
5.1. MANAGING DIRECTOR: ......................................................................................................................................... 3
5.2. GENERAL MANAGER / DEPARTMENTS MANAGERS: ................................................................................................ 3
5.3. CONTRACTS / LEGAL DEPARTMENT: ..................................................................................................................... 4
5.4. SUPPLY CHAIN DEPARTMENT: .............................................................................................................................. 4
5.5. QHSE MANAGER / MR: ....................................................................................................................................... 4
PROCESS ................................................................................................................................................................. 4
6.1. SUPPLIER SELECTION AND MANAGEMENT PROCESS ............................................................................................... 4
6.2. PLANNING, (RISK ASSESSMENT OF THE WORK SCOPE); ......................................................................................... 4
6.3. PRE-TENDER CAPABILITY ASSESSMENT: .............................................................................................................. 5
6.4. LOCAL CONTRACTORS PREFERENCES .................................................................................................................. 5
6.5. TENDER AND AWARD ........................................................................................................................................... 6
6.6. PRE MOBILIZATION - ESTABLISH QHSE PLAN:....................................................................................................... 7
6.7. CONTRACTOR MANAGEMENT: .............................................................................................................................. 7
RECORDS ................................................................................................................................................................ 9
REFERENCES/RELATED DOCUMENTS ............................................................................................................... 9
FORMS ..................................................................................................................................................................... 9
• BTTELI ENERGY -QHSE-SF-024: “SUPPLIER / CONTRACTOR PRE-QUALIFICATION QUESTIONNAIRE”
FORM ................................................................................................................................................................................ 9
• BTTELI ENERGY -QHSE-SF-038: “CONTRACTOR AUDIT TEMPLATE” FORM ................................................ 9
Revision Date:
Page No: 3/9
Purpose
BTTELI ENERGY is committed to selecting the best available contractors & suppliers who can demonstrably comply
with our QHSE standards and who are properly risk assessed, prior to contract award, as fully capable of maintaining
their performance throughout the contract period.
The purpose of this Contractor management Procedure is to ensure a consistent methodology so that the Quality,
Security, Safety, Health, and Environment risks, associated with our contractors, are identified, well managed and
communicated properly.
BTTELI ENERGY will evaluate potential Contractors to establish if they have sufficient, satisfactory experience and
the capability to undertake the Contract specific activities in accordance with the BTTELI ENERGY QHSE/Integrated
Management System requirements.
For those contractors not qualifying, a feedback mechanism is in place to inform them why they did not qualify, and
how by correcting the identified deficiencies they may qualify for future opportunities.
Scope
This procedure applies to all Departments and Locations of BTTELI ENERGY . It applies to all contracts and to those
contractors where the product or service to be delivered could adversely impact on our QHSE performance.
Definitions and Abbreviations

Abbreviation Description
QHSE Quality, Health, Safety and Environment
HSEM/MR HSE Manager/Management Representative
QHSEMS Quality, Health, Safety and Environmental Management System
IMS Integrated Management System
The systematic application of management policies, procedures and practices to the activities
RISK
of communicating, consulting, establishing the context, and identifying, analysing, evaluating,
MANAGEMENT
treating, monitoring and reviewing risk
CONTRACT Persons or entities identified by senior management as having the authority and accountability
MANAGER to manage the Contract within a Department or Region
CONTRACT Person with responsibility to manage contract negotiation, monitoring and dealing with
OWNER Contractor senior management on contractual and performance issues
Key performance Indicators set during contract negotiation phase to enable performance
KPI
management of the contractor.
Responsibilities
5.1. Managing Director:
Managing director responsible to ensure the resources is sufficient and fit for purpose.
5.2. General Manager / Departments Managers:

Responsible for compliance with and implementation of the requirements defined in this document, with support from
the QHSE, Contracts, Legal, and Supply Chain functions, as considered necessary with regards to the assessed
Risk of the required service or product. In particular line management shall ensure that:
• Decisions regarding QHSE obligations and responsibilities are made in coordination with the appropriate
support departments;
• A Risk Assessment of the work scope has been completed and required controls properly defined in
accordance with TRA (Risk Assessment
• QHSE interfaces have been adequately established;
Revision Date:
Page No: 4/9
• QHSE obligations and responsibilities have been agreed between the contracting parties and adequately
addressed in the signed contract prior to delivery of products or performance of services;
• QHSE related KPIs are agreed and performance reviewed on a regular basis.
5.3. Contracts / Legal Department:

Is primarily responsible for managing the contractual process, associated with tenders/contracts, initiated to
provide services and/or products to, or on behalf of BTTELI ENERGY.
5.4. Supply Chain Department:
When dealing with Contractors for the provision of products and/or services to support BTTELI ENERGY, the
Supply Chain function is responsible for:
• Promoting and implementing of the Supply Chain Management process;
• Coordinating the definition of the work scope;
• Assisting in the selection and approval of contractors;
• Providing input to the KPI’s;
• Agreeing terms and conditions with Legal/Tax departments, if they vary from the standard contractual
position associated with the procurement of products and/or services;
• Assisting in the performance monitoring of Contractors;
• Managing/maintaining a Contractor Register.
5.5. QHSE Manager / MR:

Is responsible for:
• Assisting in risk assessment;
• Establishing QHSE interfaces;
• Reviewing and providing QHSE input to pre-qualification documents;
• Assisting in setting and reviewing contract QHSE clauses and related KPIs;
• Assisting in QHSE assessments & audits.
Process
6.1. Supplier selection and management process
The following Flow chart shows the process of Supplier selection and management in BTTELI ENERGY (refer to
Annex -1- Supplier Selection & management Process).
6.2. Planning, (Risk Assessment of the work scope);
The level of risk involved in the work scope to be executed must be assessed according to the BTTELI ENERGY Risk
Assessment & Control procedure.
Based on the risk assessment, appropriate controls shall be defined to ensure identified risks are reduced as low
as is reasonably practicable. As a minimum, the Risk Assessment should include consideration of the following:
• Nature of the work – equipment & materials to be utilized;
• Location of the work;
• Simultaneous activities;
• Potential for exposure to worksite hazards;
• Potential exposure to hazards for all personnel involved in the activities;
• Potential consequences of incidents;
• Potential Social Impact
• Environmental aspects;
• Delays of project development;
• Delay in production operations;
• Delay in delivery of goBTTELI Energy/services;
• Legal claims;
Revision Date:
Page No: 5/9
• Financial loss/impact, and associated insurance requirement;

• Potential for an HSE incident
• Potential for a Service Quality non-conformance
6.3. Pre-Tender Capability Assessment:

A pre-qualification process will be completed for all Service Providers. Only Prequalified Contractors are to be
invited to tender for BTTELI ENERGY Business. This is to ensure the Contractor selected to deliver the product or
service has the capability to do so in accordance with Contract service scope and associated QHSE requirements.
When dealing with contractors, directly in support of BTTELI ENERGY operations, the prequalification process
must be conducted by the Supply Chain Department.
The pre-qualification is achieved by issuing a standard format document for the Contractor to complete,
supported where necessary by historical performance records. (refer to “Contractor HSE Questionnaire”). The
initial QHSE capability, based on the questionnaire, may, if necessary, be complemented by site inspections of
current contractor work sites, when deemed necessary by the scope of work.
For those contractors not qualifying, a feedback mechanism shall be in place to inform them why they did not
qualify and that by correcting the identified deficiencies they may qualify for future work. Should the Contractor
make use of subcontractors, the prequalification assessment will be used to ensure the Contractor retains full
responsibility for QHSE compliance and Performance.
6.4. Local Contractors Preferences
BTTELI ENERGY recognizes its role in the local community as a purchaser of significant quantities of go BTTELI
Energy and services. Given that role within the local community, it is important that it also consider the potential
positive effect it can have in encouraging and facilitating the local economy through considering the level of Local
Content contained in Offers for the supply of go BTTELI Energy and services. Through the provisions of this
Procedure, BTTELI ENERGY aims to encourage the development and promotion of business and industry within
the Regions where it operates, and, in so doing, assist in creating growth and employment in the region. In
accordance with this Procedure, BTTELI ENERGY will apply a preference as specified herein to offers for the
provision of go BTTELI Energy and services that demonstrate a level of Local Content.
Offers must be sufficiently detailed to enable BTTELI ENERGY to assess Local Supplier status or the level of Local
Content included. To support assessment of Local Supplier status or the level of Local Content contained in Offers,
BTTELI ENERGY may provide pro-forma templates to bidders for completion and/or require bidders to provide
necessary detail in another form(s).
In assessing Offers, BTTELI ENERGY must be reasonably satisfied as to Local Supplier status or the level of Local
Content stated. It is the responsibility of bidders to provide relevant documentary evidence to establish the
veracity of the claimed Local Supplier status or level of Local Content. BTTELI ENERGY retains the right within its
sole discretion to accept the veracity of stated Local Content.
To assess Offers, BTTELI ENERGY may develop appropriate evaluation criteria for individual procurement
transactions. Price and Local Content will be mandatory criteria. Other non-price criteria may also be applied
dependent on the specific circumstances.
A weighting will be applied to each evaluation criterion. Local Content will have a mandatory weighting of 10% of
the total evaluation criteria. Weights applied to price and non-price criteria will have a maximum cumulative
weighting of 90%.
The level of Local Content will be assessed as follows:
• The level of Local Content in an Offer submitted by a Local Supplier will be assessed at 100%
• The level of Local Content in an Offer submitted by a non-Local Supplier will be assessed at the
percentage of the Net Costs of their Offer which includes or is attributable to Local Content.
‘Net Costs’ means the total amount offered by the bidder for the supply of go BTTELI Energy or services,
including freight or delivery charges, excluding any discounts or rebates offered by the bidder.
The maximum adverse financial implication to BTTELI ENERGY per procurement transaction arising from
the application of this Procedure will be limited. In setting the limitations, BTTELI ENERGY recognizes that
different types of procurement will have varying effects on the Local economy. For this reason, this Procedure
recognizes three types of procurement and contracts:
Revision Date:
Page No: 6/9
1. “Services”
2. “GoBTTELI Energy”
3. “Works”
6.5. Tender and Award
• Develop Scope of Services:
The Scope of Services/Work to be included in any Tender documents developed in Stage 6.1 must include all
necessary QHSE specifications and obligations. It is essential to define the procurement item in sufficient
detail to allow prospective contractors to determine if they are capable of providing the item and to identify
the major QHSE impacts.
• Establish Contract Terms & conditions / QHSE requirements:
Terms & conditions, including applicable QHSE requirements, should be defined and included in the proposed
contract part of the tender package. When a Master Agreement is already in place, any proposed deviation or
exception to the agreed QHSE requirements contained therein shall also be clearly stated.
• Define Evaluation Criteria:
A set of evaluation criteria should be defined and recorded before tendering for products or services is
initiated to ensure that the tenders can be objectively and accurately assessed on the basis of price, technical
ability, reputation, ability to meet schedule and QHSE performance.
• Define Contracting Strategy:
One of the most important strategic contract management decisions to be made by BTTELI ENERGY is on the
way in which the contractor or alliance of contractors is held responsible for the management of QHSE. Three
distinctly different modes are described below.
Mode 1 - The contractor provides people and tools for the execution of the work under the supervision,
instructions and QHSE/IMS of BTTELI ENERGY. The contractor has systems that provide assurance that its
people are competent and that the tools/ equipment are properly maintained and suitable for the work.
Mode 2 - The contractor executes all aspects of the job under its own QHSE management system and
provides the necessary instructions, supervision and verifies the proper functioning of its QHSE management
system. BTTELI ENERGY is responsible for verifying the overall effectiveness of the Contractors management
controls put in place and for assuring that the BTTELI ENERGY and contractor’s QHSE management systems
are compatible.
Mode 3 - Contractor operates within its own QHSE-MS that has no interfaces with BTTELI ENERGY’s QHSE/IMS
and is not required to report QHSE performance data including incidents to BTTELI ENERGY. However, this
does not exclude the possibility that BTTELI ENERGY may wish to guide and influence QHSE performance
under this type of contract.
Selection of only one of these modes is required and should be in alignment with local and national legislative
requirements.
In certain situations, it may be necessary to adopt a mixture of modes 1 and 2. The interfacing of activities
between the client, contractors and subcontractors should be agreed by carrying out a gap analysis of their
QHSE-MS. The QHSE-MS elements which take precedence should be specified by means of an interface
document before work commences, a Bridging Document must be produced for that concern.
When working with more than one contractor, it is preferable to identify a lead (prime) contractor.
Joint responsibilities should be avoided by breaking down the work into smaller identifiable activities, each
with a party assigned for responsibility of the SQ or HSE aspect.
• Selecting & Contracting
The predefined evaluation criteria must be used to evaluate tenders and objectively select contractors to
provide products and/or perform services.
Contract Owner, as the ultimate Risk Owner, (or for Major Risk tenders, a tender committee), must review the
QHSE plan prepared at tender phase by the contractor and will assess how effective the contractor has been
in providing assurance that all significant hazards have been identified and that suitable controls are planned
to reduce the risk to a level “as low as reasonably practicable”.
A joint BTTELI ENERGY and contractor “pre-award” meeting with each potential contractor may, if necessary,
Revision Date:
Page No: 7/9
be used to clarify and further assess the suitability of the contractors’ QHSE plan and processes and how the
plan or processes interact with the QHSE/IMS of BTTELI ENERGY.
Following these “pre-award” meetings, the Contract Owner should assess whether the QHSE requirements
and minimum criteria, as defined in above (Establishing the tender evaluation criteria) have been met. This
appraisal should be documented as it is one of the crucial evaluation criteria for awarding the contract. If this
appraisal identifies that the contractor has not met the criteria and is the only choice available, then BTTELI
ENERGY must work with the contractor to ensure that identified gaps are effectively addressed prior to the
execution phase.
Whenever gaps are identified between the expectation of BTTELI ENERGY and QHSE capability of the
contractors, BTTELI ENERGY will establish a supervision strategy in relation with both the risk level and the
capability of the contractors to manage QHSE.
• Contract Award
Once the award has been made, joint meetings should be held as soon as possible to agree on the final details
of the QHSE plan and its implementation. The agreed documentation on the QHSE plan together with the
identified interface requirements should be part of the contractual agreement.
• Review and sign contract
Prior to execution, Contracts will be reviewed by respective support Departments to ensure that the relevant
terms and conditions, and QHSE requirements have been incorporated into the Contract document. It is
preferred that Contracts are formally signed before commencing the scope of work. However, in certain
instances, it is acceptable to commence the work if an appropriate Letter of Intent/Award has been received
and authorization given by Senior Management.
6.6. Pre Mobilization - Establish QHSE plan:
As part of the contracting process, the contracting parties shall put in place a documented QHSE Management
Plan will be adhered to in the contract, including the preparation of an appropriate interface document, when
applicable.
While it is permissible to provide contractors with validated BTTELI ENERGY QHSE statistics, the provision of
internal BTTELI ENERGY QHSE documents (in particular standards and procedures) and reports is possible only
when stated as an obligation in the Contract and/or when authorization has been given by senior
management.
A meeting(s) should be structured as an HSE workshop, with participation by both client and contractor
management. The meeting may also provide an opportunity to discuss the need for a pre-mobilization audit.
As minimum the following elements will be considered to determine the respective responsibilities:
• Review of Risk Profile of the Activity to be contracted,
• Confirmation of pre-mobilization activities and timetable for completion.
• Roles and Responsibilities of both parties.
• Confirmation of Contractor Employees Competency, review of CVs of proposed personnel.
• Confirmation of KPIs and benchmarking of starting reference figures.
• Interaction of BTTELI ENERGY and Contractor ERPs.
• Incident reporting and investigation responsibilities.
• Management of Change.
• Hazard Analysis & Risk Control.
• Management of Simultaneous Operations (SIMOPS).
• Agreement on process of reporting, tracking and closing out non-compliances or incidents.
6.7. Contractor Management:

• Mobilization
During Mobilization of the equipment or personnel contracted, BTTELI ENERGY may, depending on the
criticality of the contract, conduct inspection of equipment prior to dispatch, upon receipt of goBTTELI Energy,
and of CVs of personnel of the Contractor prior to approval for working on BTTELI ENERGY jobs. If any maters
of concern are identified at this stage these should be reviewed against contract terms and conditions,
Revision Date:
Page No: 8/9
including the QHSE Plan, and appropriate corrective actions agreed with the Contractor.
• Execution
During execution of the work, BTTELI ENERGY must monitor the continued competence of the Contractor.
This refers to any associated training commitment undertaken. Where necessary, BTTELI ENERGY should also
determine if any additional competence assurance is needed as a result of local circumstances. Monitoring
should include a verification that the Contractor complies with competency requirement stated in the
contract that may include:
• Competence and close monitoring of the replacement of personnel;
• Training of Contractor personnel in job related activities and procedures;
• Completion of all agreed-upon trainings, including any specified statutory training requirements.
A QHSE audit and review programme may be prepared stating specifically what is expected of the BTTELI
ENERGY contract holder in ensuring that the QHSE plan is adhered to during the execution phase, together
with details of how the performance of the contractor is to be measured. Refer to “Contractor Audit
Template”.
• Quarterly Performance Evaluation - KPIs
All Contractors are to be evaluated quarterly on the basis of their performance. BTTELI ENERGY and
Contractor’s line management needs to participate and sign the KPI sheet. Action items need to be agreed
and follow up. Refer to KPI format document.
• Demobilization
The objectives of this phase are to assure that the demobilisation is conducted according to the QHSE plan,
and that roles and responsibilities are clearly understood and complied with throughout this phase. The
hazards associated with demobilisation should be reassessed, and any new hazards identified, and controls
implemented to minimise the risks. The QHSE plan should be modified accordingly.
Special attention needs to be placed on possible issues with:
• Emergency response
• Site restoration and re-instatement.
• Waste management and disposal.
Demobilisation is especially hazardous as personnel are leaving the contract and facilities are being
decommissioned.
• Final Evaluation and Close out
Final analysis, for larger contracts in a close out meeting with the contractor should provide a summary of
conclusions which should address:
• Quality of the QHSE plan and its relevance to the overall contract performance, stipulating what was learned
and how future, similar contracts should be structured.
• Highlighting positive aspects of learning and how they can be applied in the future. This learning should be
shared with the contractor, who should share with subcontractors.
• Incorporation of any new hazards identified into the risk assessment and management process for future
contracts.
• Analysis of both the client and contractor’s QHSE performance against both the QHSE plan and KPIs, for
mutual improvement.
• Information on the contractor to be added as a reference for the client bid list and which may provide advice
for improvements in future QHSE capability assessments.
• Critical QHSE documentation and records associated with the contract.
The QHSE close-out data should be recorded and made accessible for future reference. A documented record
of QHSE performance should be kept for each contractor. The contractor should be advised that its overall
performance and QHSE record will be taken into account when being considered for future work.
Revision Date:
Page No: 9/9
Records
All records of minutes of meetings, risk analysis sessions, participation records, KPIs, etc., must be stored on the
Documentation site of the QHSE Function with links to relevant Department and Operational Sites. All sub-contractor
related events will be reporting and investigated in BTTELI ENERGY Reporting system, follow all applicable below
referenced standards as well. Contractors also participate in Hazard Identification and Reporting and BTTELI
ENERGY Stop Card reports, required for consultation purpose for safe, secure and perfect BTTELI ENERGY
operations.
References/Related Documents
• BTTELI ENERGY-QHSE-MSM-001: BTTELI ENERGY QHSE IMS Manual
• BTTELI ENERGY-QHSE-SP-02_Risk Assessment & Control
• BTTELI ENERGY-QHSE-SP-26_Management of Change
• BTTELI ENERGY-QHSE-SP-09_Purchasing and Supplier Evaluation procedure
• BTTELI ENERGY-QHSE-SP-10_Operational Control Procedure
• BTTELI ENERGY-QHSE-SP-19_Control of nonconforming service
• BTTELI ENERGY-QHSE-SP-20_Hazard Identification and Reporting procedure
Forms
• BTTELI ENERGY -QHSE-SF-024: “Supplier / Contractor Pre-Qualification Questionnaire” form
• BTTELI ENERGY -QHSE-SF-038: “Contractor Audit Template” form

JLX-PR-33.00 Contractors Management Procedure

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Document No: PR.33.

Revision No Revision Date Revision Description Prepared by

0 Initial document preparation Fahmi A.Taha/QHSE Manager

Prepared by: Approved by:

Fahmi A.Taha/QHSE Manager Suliman Badour/ Country Manager

Definitions and Abbreviations

5.2. General Manager / Departments Managers:

5.3. Contracts / Legal Department:

5.5. QHSE Manager / MR:

• Financial loss/impact, and associated insurance requirement;

6.3. Pre-Tender Capability Assessment:

6.7. Contractor Management:

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