Piping Projects in Saudi Arabia: An Empirical Assessment

This assignment delves into the empirical assessment of piping projects in Saudi Arabia's engineering, construction, and architectural management sectors. It covers key aspects such as impacts of human resource development on project success, critical factors in managing relationships in international EPC projects, project procurement management, man-hour evaluation of nuclear power equipment procurement, effective contract management strategies, commercial terms and conditions, negotiation elements, and Uniform Commercial Code filings.

PROJECT PROCUREMENT

TABLE OF CONTENTS
QUESTION 1...................................................................................................................................1
Determining basic factors which are used to negotiate an agreement....................................1
Framing a negotiating strategy for MFB company................................................................3
QUESTION 2...................................................................................................................................4
Analysing and selecting some effectual techniques for contract management......................4
QUESTION 3...................................................................................................................................8
Analysing role of commercial terms and conditions, UCC and ............................................8
Role of commercial terms and conditions..............................................................................8
Uniform commercial code......................................................................................................8
Government rules applicable on outcomes of MFB...............................................................9
REFERENCES..............................................................................................................................10

QUESTION 1
Determining basic factors which are used to negotiate an agreement
A procedure in which specific plan or schedule is prepared at the workplace and
implemented in the business is known as project procurement. There are several kinds of projects
and plans made by an organisation for which this specific aspect is highly supportive. Apart from
the projects, at the time of dealing with contract and managing also the project procurement
taken into account by the firms. The present study is based on a case study of the multinational
F&B company where scenario of the energy sources is considered. As per the case, the cited firm
is going to contract with GEP market intelligence for determining effective price of natural gas.
GEP is a public limited enterprise which mainly operates in the procurement service where it
provides consultancy for outsourcing, contracting etc. to various firms (De Araújo, Alencar, and
de Miranda Mota, 2017). In the current scenario, contract made among two parties i.e. MFB
company and the GEP market intelligence. The MFB firm wants to analyse supply and demand
conditions of the natural gas which will help to make effectual pricing judgements. For this
particular service, MFB contracts with the GEP market which will support to it in order to
analyse the whole market situations in proper manner.
When MFB is going to make contract then using negotiation strategies because these
helps to deal at the low cost. While negotiating for a contract, there are several elements
considered by the party. In the current case study, some factors are analysed which are majorly
used by the firms or party when negotiating for the contract. Further, such factors for effective
negotiation related to contract of MFB business organisation are analysed below:
 Power: In any business environment negotiation easily gets converted into the arguments
where some aspects are fierce due to which satisfactory outcomes cannot to be achieved.
Apart from this, sometimes discussing turns into quarrelling where contract cannot be
negotiated in beneficial way. Therefore, instead to using power at the time of negotiating,
party like MFB firm should discuss calmly. The reason is that aggression in the human
never provides a good outcome. Further, when the party thinks that some conditions are
out of hand then it should take some time and then negotiate for the contract (Davis,
2014). Hence, power should completely avoid when party is negotiating for the particular
contract.
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 Communication: Another aspect which necessary to be kept in mind while negotiating a
plan is communication. Generally, a successful and beneficial negotiation is not a part of
compromise but instead of this when effective communication done between both parties
then objectives can be properly achieved. As per this, when one party like GEP market
speaks then MFB should keep calm and listen carefully. Moreover, active listening
communication skills must be there in the parties at the time of negotiating of a contract.
Apart from this, when party listens and speaks all the things related to contract in an
understood manner then negotiation can become effectual (Mosley and Bubshait, 2017).
Smooth conversation makes the deal better where negotiation also become effective at
the working place.
 Options: Before negotiating on particular plan or contract, party must design options for
that instead of only positions. Under this, one party creates several options which help to
meet interest of both the parties involved in negotiation i.e. MFB firm and GEP market.
At the time of making options for the negotiation both parties should be beneficial
properly. On the other side, if the parties unable to make beneficial options or alternatives
then effective negotiation cannot be done of the contract. The reason is that until and
unless both parties are not satisfied then proper negotiation is not possible among MFB
enterprise and GEP market.
 Leverage: An aspect in which financial as well as ethical boundaries of contract come
into consideration is identified as leverage. At the time of negotiating for project or
contract the party must discuss things and aspects related to financial conditions (Pheng,
2018). If it shows poor situations and extremely requirements of the contract then fare
negotiation can be possible. Other than this, before meeting among the parties, MFB
should make a detailed plan along with setting limits. It will help to bargain with GEP
market where deal of analysing demand and supply of natural gas can be signed at the
lower cost.
 Alternative: When the company or party is going to negotiate then it must have
alternatives and options to enter in that. The reason is that, if GEP market not offers
services and consultancy at lower or affordable prices then MFB can go with another
chance (Fisher and Ury, 2008). In accordance to this, if the party has better alternatives at
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the lower cost as compared to present contract then it will go for another instead of it.
Other than costs, in terms of implication, risks, outcomes, consequences etc. also if
alternative is the best then negotiation with one party affects up to the greater extent.
Framing a negotiating strategy for MFB company
In order to negotiate for contract and project, several kinds of the ways and methods
included which make beneficial to both the parties. If the firm not considers any effectual
technique then unable to negotiate the contract. Due to this, it may be possible that company
cannot get benefits and suffered from loss. As per the current project, contract made between the
company multinational F&B and the GEP market intelligence. For taking consultancy services
from GEP related to market analysis of natural gas products, MFB should use a specific strategy
at the time negotiation. It needs to apply BATNA framework at the working place which stands
for Best Alternative To A Negotiated Agreement (Zhang, Zhou and Zong, 2017).
On the basis of this, firstly the enterprise has to analyse alternatives also if any in terms of
costs, qualities, consequences and other needed features. Between two or more chances, one
which will provide the highest benefits that will be chosen by the selected company. The selected
strategy of negotiation has basic focus on the successful of negotiator. Therefore, one who adopt
this particular tactic at the working environment, become highly beneficial as well as successful.
It is one of the highly supportive strategy to complete the negotiation procedure in the firm. As
per this, the MFB company needs to invent list of all the actions which it can take while going
for negotiation. Apart from this, it should convert promising opinions as well as transforming list
of actions into tangible as well as partial options respectively (Bruno and et.al., 2017). Hence, the
management of MFB should select BATNA negotiation strategy which will help to it for
negotiating contract with GEP in beneficial manner.
The reason for suggesting BATNA negotiation tactic is that, MFB easily able to select
the best alternative or option for analysing market conditions of natural gas. As per the case
study of multinational F&B firm, it is going to set effective pricing of the natural gas (NG)
products or energy resources. Further, when it negotiates then will be beneficial for to select the
best alternative for analysing supply and demand of natural gas. On the basis of this, it able to set
an effective as well as profitable price of the NG products (Davis, Jefferies and Ke, 2017).
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Therefore, MFB can save huge amount of energy sources along with boosting up the total sales
and incomes.
QUESTION 2
Analysing and selecting some effectual techniques for contract management
A process of formulation, implementation, execution as well as analysis of contract for
boosting operation and financial performance of the firm is known as contract management.
Higher use of this specific terms at the workplace makes the whole business very effectual and
productive in the industry. The reason is that, through contract management company easily able
to deal with contracts properly. As per the current study, multinational F&B is going to deal a
contract with GEP market intelligence in order to set profitable price of natural gas. At the time
of managing contract various strategies and methods are used by the companies through which
they can implement the plan properly. In the procedure of contract management some steps or
stages come into consideration which can be implemented at the workplace of MFB firm (Li,
Zhou and Zhang, 2017). The stages of contract management plan are such as follows:
 Enabling the contract management
 Monitoring and controlling over the contract performance
 Apply the change management if performance is poor
 Management of dispute and solution of it
 Management of financials or payment
 Completion and review of contract
 Close out
On the basis of the above listed steps, MFB able to complete the procedure of contract
management at the workplace. For completing this framework some effective techniques are also
available which support to the MFB and GEP market to accomplish contract in smooth manner
(Enyinda, 2017). Further, such techniques are explained below: Developing contract management plan: At the time of managing whole contract of
market analysis of natural gas, when MFB develops overall plan about this then able to
meet its aims and objectives. Under the plan all the aspects associated with contract are
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defined priorly like time, activities, cost, human resource needs etc. Further, time for
evaluating and managing the contract is also predetermined at this kind of strategy. This
mentioned technique of an effective contract management plan provides clear and
specific outline of the overall plan. In this way, time and cost both elements are clearly
stated which will be consumed by GEP market intelligence to accomplish contract made
with MFB enterprise. It is widely used strategy due to its simplicity and easiness for
using as well as applying at the workplace of cited organisation (Fateh, Mohammad and
Shukor, 2017). Status Analysis: Another technique which support to management of MFB for analysing
contract and managing it is status analysis. Under this, activities prepared for carry out
research of supply and demand of natural gas in the country are reviewed within
particular period of time. At this kind of method, each and every phase or activity of the
contract is to be reviewed by the management or party i.e. multinational F&B entity. On
the basis of this, it has been analysed that how many activities are completed and how
many are remained (6 Strategies for Effective Contract Management, 2017). Along with
this, time taken to complete each activity is also analysed along with time-frame left.
During the analysis of contract status, if MFB finds that there are huge time consumed for
analysing supply and demand condition of natural gas then corrective actions will be
taken. In this, management will provide or aware the team members about several time
strategies. On the basis of this, individuals will manage time resources and complete
analysis of market situations in proper direction. Do a Background Check: In accordance to this technique of contract management, the
authorised party of MFB and GEP has to check and evaluate background of the market
analysis. As per this specific method, they will be able to know how many tasks are
completed and how many works are remaining. Other than this thing, if there are any
existing commitments made among both parties are also reviewed in terms of past
relationships. Further, impact of past performance will on the present contract of market
analysis can be discussed in an effective direction. During application of this particular
contract management strategy if MFB finds that in the past some lacks occurred due to
which overall contract affected negatively, then actions in the present time will be taken
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in an appropriate direction. Therefore, performance will be easily evaluated and enhance
of the MFB in terms of deriving price of the natural gas products. In addition to this,
without checking or evaluating background of the overall contract the parties should not
make an agreement (Alencastro, Fuertes and de Wilde, 2017). It is the best strategy for
analysing costs as well as performance of the contract and achieve objectives properly. Establish the contract life-cycle: As per this, all stages of the contract life-cycle are to be
framed where specific requirements are that establish an effective contractual
relationship. Under this method, at the initially outline of the whole contract is made
where scope statement is to be prepared. Once the good practice is completed like scope
statement then documents which required are established by the selected organisation i.e.
multinational F&B company. With the help of this contract management method, the
party among with contract is signed able to organise compulsory procedures, deliverables
and time for review the plan. In this kind of method it is significant to determine basic
pieces or activities of the information which firm needs from the another party. As per the
case study, the management of MFB has to determine things and needs which it wants
complete through GEP market intelligence. The reason for predetermining such all the
things is that, MFB can smoothly make or prepare an accurate as well as complete
contract (Alleman and et.al., 2017). On the other side, until and unless needs and wants
are bot predetermined at the time of establishing contract then MFB unable to manage in
an effective direction. Therefore, it can be said that it is one of the best and effectual
strategy to manage the whole contract and achieve desired objectives. Outline Consequences of Delays: Time is one of the significant asset for every
organisation and value of this is more than money. Due to this particular situation, the
firm can boost up its sales and time management at the workplace. As per this, under the
scope statement the party must mention time allocation for each activity of the contract or
market analysis. Further, consequences or outcomes are cleared with individuals or team
members about the delays in time. In the business environment of any organisation if
tasks delays due to lack of using effective time management then directly affects on the
cost aspect. For example: for researching demand and supply of natural gas if individuals
take more time, then MFB has to pay extra salary as time delays. It is one kind of
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incurring additional costs in the firm which affects to the overall cost of contract in an
adverse direction. When MFB company applies this method in the working environment
for analysing market conditions then easily able to manage expenses associated with the
contract. In this, the management must make sure that another party which involved in
contract i.e. GEP market aware about the outcomes of delays project with time (Bowers
and Norris, 2017). If any condition incurs like this due to some specific circumstances
then details related to change requests are to be provided to the team members. Under
this, management of MFB can use or implement some time management strategies which
will support to manage and reduce time for completing the contract in proper direction.
 Step Back, Document and Evaluate: Lastly, the company must take a step back where it
able to evaluate all the documents signed at the time of making deals between two
parties. Specific reason behind this is that, in contract if any issues or lacks left at the
time of signing agreement that can be identified and resolved. It is one of the highly
proper and effectual type of the technique by which multinational F&B easily able to
manage various terms of contract like cost, schedule, performance etc. Therefore, it can
be said that documentation stage should not skip to the selected enterprise. Apart from
this, once the process of documentation completed and overall contract become effective
at the working environment then MFB requires evaluating it. In case it not able to make
proper review and evaluation of the contract then unable to manage whole procedure in
proper way. In accordance to this, the MFB must take internal meeting with the manager
and team members of market analysis of natural gas (Nguyen, Hadikusumo and
Hadikusumo, 2017). During the meeting it should determine key points of the contract,
assess causes or outcomes of them as well as review measures which considered. Until
and unless the firm not able to evaluate the plan properly then cannot manage contract in
an effectual direction.
By considering the above analysed several methods in order to manage the contract made
between two parties it can be said that, when MFB implements such all the techniques at the
workplace then can manage contract properly. Along with this, it can reduce cost of contract,
manage time, enhance performance and manage changes appropriately.
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QUESTION 3
Analysing role of commercial terms and conditions, UCC and
Role of commercial terms and conditions
In order to have fair contract agreement between all the included parties. There is need to
understand the commercial terms and conditions which must be implemented by MHB and GEP
market. Hence, there are several terms and conditions such as:
Acceptance of the agreements: Both the parties are making a deal and agreed on the
contract this will be fruitful as if they have accepted the contract as well as signed upon it
(Commercial Terms and Conditions, 2017).
Authority: The acceptance of the offer must contains the details relevant with the both
the authorised parties such as MHB and GEP market. Hence, the date of signing such contracts
must be listed in such documents.
Sponsorship and Promotion: In order to obtain favourable capital funds by the parties
there must be information listed with the requirements and the amount of funds by the sponsor.
Hence, these will help them if any breach of contract took place than they will be able to claim
such amount of losses.
Marketing: In accordance with the contractual agreements between both parties which
are to be listed in the documents such as methods to be made in making marketing of such
brands. Hence, there must be mentioned of the names and details of the people who are involved
in promoting the companies such as in Radio publicity, Newspaper advertising, Tv, Hoardings
etc. which are need to be listed by the parties who are advertising such company.
Uniform commercial code
The law was established as to have the favourable harmonizing and uniformity in
facilitating the fair trade and commerce. Hence, in terms of managing the commercial activities
in the country the legislation helps the in making proper assessments over the sales and
purchases made by various organisations. Thus, such laws are in act as to prevent commercial
drawbacks in the nation as well as helping the society with fair transactions (Uniform
Commercial Code Filings - General Information, 2017). Moreover, the law also helps to
overcome the lease oriented cases as well as bank deposits and relevant legal transactions.
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Government rules applicable on outcomes of MFB
From the current project it has been analysed that multinational F&B enterprise is
beneficial after signing contract with the GEP market intelligence in terms of financials. In the
market of natural gas prices falling where firm it has to make short-term contract with the
retailers of natural gas which operating in South Australia. From this particular kind of contract
MFB able to save huge amount at the workplace and realised that it will save more that 10
percent amount. On this basic rule which will be imposed by the government is related to tax
amount. The reason is that, when a company saves higher the amount and generates huge profits
then it has to pay more taxation as per the rules and regulations of government (Pal, Wang and
Liangm 2017). Apart from this, the MFB has to contribute more percentage amount in the GDP
rate of Australian economy as per the regulations of government.
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REFERENCES
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<https://hms.harvard.edu/sites/default/files/assets/Sites/Ombuds/files/
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