CONTRACT AND PROJECT APPROVAL POLICY
Prepared By:
Approved By:
Revision Date:
Effective Date:
PURPOSE
The purpose of this policy is to enable the company to:
• Track the intake of new contracts or internal projects.
• Conduct a review and approval process associated with said contracts or projects in order to identify risk
properly and all relevant issues.
• Serve as a historical record of the company’s significant transactions.
This policy requires the company and all subsidiaries and affiliates to operate under a formal and disciplined
approach for evaluating, negotiating and executing documentation related to significant contracts and internal and
external projects with legal and/or financial implications.
SCOPE
This policy applies to Company X, its subsidiaries and its affiliates (the company), including its employees, agents
or independent contractors that could create a legal obligation on the part of the company.
This policy applies to all contracts regarding financial or physical assets or personnel of the company.
Additionally, this policy applies not only to projects that are directly related to services being rendered to clients
but also to those which could have significant legal and financial implications for the company.
This policy is not intended to apply to miscellaneous contracts which are ordinary in nature or which do not impact
the central business of the company. Examples of excluded contracts include:
• Computer or office equipment leases and related service and maintenance contracts
• Utility contracts
• Standard form contracts using Company X or other approved forms which require no negotiation
• Matters of a recurring nature involving suppliers or vendors with whom the company has previously done
business using master service agreements, company purchase orders, or standard terms and conditions,
which have been previously approved.
It is important to note, however, that all executive officers and management should always strive to seek
assistance from the legal department as it pertains to all legal aspects of their decision-making. In the
event of doubt regarding the applicability of this policy, the legal department should make the
determination.
DEFINITIONS
• Contracts: This includes tenders, subcontracts, mergers and acquisitions, rig sales, rig purchases, joint
ventures, letters of credit, and memoranda of understanding.
• Projects: This includes corporate or subsidiary reorganization projects, formation or dissolution of legal
entities, new business lines, entry into new jurisdictions, and extraordinary intercompany transactions.
• Senior Management: This includes the chief executive officer, president, chief financial officer, general
counsel, and divisional vice presidents (both corporate and subsidiary level).
• Project Leader: This is an individual who has been assigned the overall responsibility and coordination duties
of the contract/project.
• Multidisciplinary: The functions or departments responsible for reviewing and approving the
contracts/projects. These include accounting, human resources, information technology, legal, marketing,
operations, tax, treasury, and outside consultants/advisors as needed and applicable.
POLICY
GENERAL
All contracts, projects, or other significant financial or legal commitments entered into by the company should
include an applicable multidisciplinary review prior to executive approval.
All executives, management and employees of the company involved in coordinating, reviewing or approving
contracts or projects should, at all times, observe and adhere to a structured process for the intake,
dissemination, review and approval of contracts and projects.
CONTRACT/PROJECT REVIEW
All contracts, projects or other significant financial or legal commitments will be reviewed and approved as follows:
• Following initial contact and discussions between the company representative and the client or third party, a
“project leader” will be assigned the overall responsibility of coordinating all aspects of the contract/project. In
the event of internal projects, the project leader will be assigned after the initial kickoff meeting. The project
leader may originate from the executive group, operations, marketing, accounting, human resources,
information technology or legal department.
• The project leader will be the single point of contact internally and externally for coordination of the contract/
project review process.
• The project leader will be responsible for calling a meeting of the multidisciplinary group to discuss the
proposed contract/project. Representatives from the various disciplines that are determined in the meeting to
be needed in the contract/project review process will be referred to as the project team.
• The project leader will be responsible for timely soliciting review and counsel from the project team for the
particular contract/project, including holding periodic project team meetings discussing the status of the
contract/project. Throughout the review and approval process, the project leader will be responsible for
circulating a project approval sheet (see Annex A) to all project team members for signature approval.
• Following full review and negotiations, as applicable, by the project team, the project leader will seek senior
management and board-level approval on the contract/project in accordance with the delegated authorization
approval policy.
• Upon approval, the project leader will ensure the execution of applicable documentation.
• The project leader will ensure (through verification with the legal department) that only authorized company
representatives (i.e., an officer or legal representative) should execute applicable documentation in
accordance with the delegated authorization approval policy.
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• Following the execution of all relevant documentation, the project leader will circulate copies of the final
documentation to the legal department and notify the accounting, marketing, operations and treasury groups of
the existence of signed documents.
• Finally, completed project approval sheets will be circulated to all applicable departments, including the legal
department for historical records.
RESPONSIBILITIES OF SENIOR MANAGEMENT
Senior management is responsible for keeping itself informed of the general nature of ongoing contracts/projects
and their status. The president and each divisional vice president of the company (at both the corporate and
operating subsidiary levels) should (personally or through a proxy), at least quarterly, organize a formal meeting
and presentation regarding the status of new, open and ongoing, and closed contracts and projects.
The president or divisional vice presidents may enlist the aid of the company legal department to track open and
ongoing contracts/projects and assist in the quarterly reviews or may alternatively enlist the assistance of
divisional controllers for such purpose.
RESPONSIBILITY
This policy should be administered by the president of the company, with the assistance of the legal department.
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ANNEX A
CONTRACT/PROJECT APPROVAL SHEET
Contract/Project Approval Sheet
Part I: Contract/Project Overview and Project Team
Prepared By (Does Not
Have to Be the Project
Leader)
Name
Title
Description of Project
Rig (s) Involved
Company X Contract
Entity/Business Unit
Counterparty
Project Team Members
Specify Project Leader)
Accountancy
HSE
Human Resources
Legal
Marketing
Operations
Outside
Consultants/Advisors
Tax
Treasury
IT
Part II Missing Checklist
Documents
Received/Project Initiated
Y/N Date
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Contract/Project Approval Sheet
Received By
Department/Country
Bid/Contracts Distributed
Y/N Date
Internal Comments
Received From PDT Y/N
Date
Contract(s) Fully
Negotiated Y/N Date
Contract Approved By By:
Management Y/N Date
(As Applicable)
Bid Submitted Y/N Date
Submission Confirmed By
Counterparty Y/N Date
Contract Signed Y/N Date
Copies of Final, Executed
Documents Delivered to
Accounting Y/N Sent to
Date
Legal Y/N Sent to
Date
Marketing Y/N Sent to
Date
Operations Y/N Sent to
Date
Part III Miscellaneous Notes (Translations, Agents, Etc.)
________________________________________________________________________________________
________________________________________________________________________________
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