The role of the Contracts Department is to best ensure that any agreement entered into by Kharafi National is balanced and fair to both parties and that it contains terms and conditions that are clear and unambiguous. Contracts reports to the Corporate Director - Contracts.
A major part of the department’s work is concerned with contracts between potential principals and Kharafi National. Its involvement in these contracts extends from the inception of negotiations until a contract is signed, after which the contract is handed over to the operational unit concerned and the Project Control Services Department. The actual work performed on these contracts varies with the type of project and whether the principals concerned are owners, main contractors or investors.
During the bid phase, the Contracts Department usually works with the Tendering Department in reviewing the terms and conditions of a proposed contract and in giving advice on issues that need to be considered during pricing. The department also proposes amendments to these contracts which Tendering may include as clarifications or qualifications in offers submitted to principals.
Where investors are involved in a BOT, BOO, BOOT or PPP type project, under which Kharafi National is to be appointed as the EPC and O&M contractor either on its own or jointly with a specialist in that type of project, the department plays a major role in preparing and reviewing the contracts. In such instances the investor will always be a member of the Kharafi Group and, in order to protect the overall interests of Kharafi as both investor and a contractor, the department ensures that the terms and conditions of the EPC and O&M contracts are fairly balanced with those of the concession contracts.
After tender results have been announced but before a contract is signed the Contracts Department is involved in final negotiations to secure the best terms and conditions for Kharafi National, whether Kharafi National is to work directly as a contractor for the owners or investors or as a subcontractor for the main contractors.
Prior to bidding, the Contracts Department works with Business Development to prepare memoranda of understanding with potential principals, particularly in the petrochemical, oil and gas sectors, in order to secure exclusive relationships with international EPC contractors and to agree basic principles on which these relationships are founded.
The Contracts Department is responsible for negotiating and agreeing a variety of other agreements, prior to review by the Legal Department, such as agency, distributorship, value added re-seller, consultancy, joint venture, consortium, and shareholder agreements. For each of these types of agreements, Contracts has established standard terms to which it always tries to adhere. However the department will consider amendments proposed by the other parties that are reasonable in the overall context of a specific agreement, subject to approval from the senior management of Kharafi National.