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Contract Compliance

A Presentation by. Contract Compliance. Aim:. Strengthening the Pillars of Business. To inform clients of the Contract Compliance Services & Capabilities offered by CorGuv. 2. CorGuv is 5 1/2 years formed after a successful SOX implentation . Background & Skills:

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Contract Compliance

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  1. A Presentation by ContractCompliance

  2. Aim: Strengthening the Pillars of Business To inform clients of the Contract Compliance Services & Capabilities offered by CorGuv. 2

  3. CorGuv is 51/2 years formed after a successful SOX implentation. Background & Skills: Contract Compliance/Management Forensic Investigations. Business Process & Risk Analysis. Project Management & Governance. Internal Control - System Design & Implementation. Joint Venture Auditing Background & Skills 3

  4. Apache North Sea. BG Group. Centrica Energy. Premier Oil. Marathon Oil. Total E&P UK. Venture Petroleum BP Exploration. Customers 4

  5. Forensic Investigations Investigative approach – ‘Beyond the Paper’ Third Party pricing checks. Cross-Referencing different data-bases. Process Reviews. Root Cause Analysis. Review & Improvements to: Procurement Processes. New Contracts. Award. Routine Scope Checks on Scope, Rates, Invoices & Processes, Man hours, Overtime, Burdens, Equipment & Running Charges Rates, Variation Orders, Amendments. The Scope of Contract Compliance Services • Monthly Contract Checks FULL SCOPE OF CorGuv’s SERVICES Feedback on ‘Actual’ Performance Long Term Benefits from a Holistic Approach 5

  6. Initial Health Check 3-5 days internal audit (normal rates). Initial report. Proposal to proceed with commercial options. Agreement on how to proceed. Independent Contract Compliance Review Forensic Audit • Audit on contractor’s books. • Monetary and procedural. • Findings and negotiating strategy. • Root Cause Analysis for future contract improvements. Negotiations on Findings • Agree Negotiating Strategy. • Negotiate Recoveries. 6

  7. Future Savings • Root Cause Analysis applied to: • Existing Contract Conditions. • New Tenders. • Invoicing Process. • New Contracts. Improvements Value Through Improvements • Future Leverage on: • Risk Reduction. • Reduction of Overcharging. • Reduction of Fraud exposure. • Cost Effective Contracts. • Contractual Relationships. 10% Strategy Scoping Tender Evaluation Award 5% Recoveries MonetaryFindings Audit Future Contracts Negotiation 7

  8. 5 year contract, £7,000,000 p.a Time taken – 25 days. Actual Cash recovered £600,000: £24,000 per day Total Reward, £95,000: £3,800per day. Time Charged client-risk - £16,000: £640per day. Contract Strategy Changes - £4,000,000: £160,000 per day Example 8

  9. Experience– 30+ years in Supply Chain, Contracts, Management, QS or Audit. All our staff are selected for their Curiousity, Persistence, Maturity, & Focus on the client-supplier relationship. Scope–Depth, Supply Chain, Root Cause Analysis, Follow-up, Sustainable Improvements. Investigative Techniques– our proprietary process ensures we find issues. Focus– Commercial/Ethical, dedication to the task, can be an addition to company audit programs. Independent– Willing to seek out reality, no conflicts of interest, completely confidential. Results– our Project Management approach delivers benefits/value in a limited time. Commercial Flexibility –Standard Rates, Fixed Price or Risk/Reward as appropriate. Why we have Something Special to Offer 9

  10. Average recovery could be 5-10 times the cost. NIC overcharges of £3.0m. Identification of excess profits of £1.5m due to unethical third party invoicing. £700 m Project – Cost Recovered - £40-50 m. Checking of sub-contract costs showed 65% discount of £1.5 m not passed on to client over 3 year period. Over charge on local delivery of 45% margin reduced to 5% (£1.0 m). Review of timesheets for engineering contract identified accounting allocation errors resulted in over charging by £1.5m. Case Studies (CorGuv) 10

  11. Performance In-depth insights and feedback of your contract's realperformance. Improved contract/procurement strategies - through feedback of actual performance. Improved service delivery. Improved contract management. Costs Cost Recoveries, if due. Sustainable future cost savings – through improvement of contract strategy & drafting. Reduction in the potential for unethical activity. Relationships Improvements with JV partners. Improvements in client/supplier relationships – through improved transparency, openness & trust. Time Time saved on dispute resolution. Time saved on invoice checking - due to improved invoice process/documentation. Risk/Reward deals - that avoid on-going consultancy costs and maintains our commitment. Business Benefits Assurance that Contracts are cost effective, commercial & Ethical. 11

  12. Based on our Core knowledge of post-award performance we can apply our experience at any point in the Contract Cycle: Post-Award contract performance, Forensic Audits. Procurement & Award Phase. Contract drafting. Contract Management. Contract Strategy. Setting up Compliance Regimes. Health Check is a low cost entry point. The Benefits . . . . . . . . . Summary We Recover for our clients what is rightfully theirs. 12

  13. Cost Recoveries Historic Errors & Overcharging. Summary 13

  14. Long-Term Improvements Contract Management and Strategy. Summary 14

  15. Experienced staff Integrity, Curiosity, Maturity. Summary 15

  16. Independence Free from operational pressures. Summary 16

  17. Deterrence of Fraud Fear of being detected. Summary 17

  18. "CorGuv have undertaken a number of contract compliance assignments  on behalf of Apache . All of these assignments have been performed efficiently & effectively and with minimal effort/input required from us as the client . Without doubt CorGuv has delivered value on each assignment. Cash recoveries alone have been substantial although that was not the primary objective in every assignment. CorGuv have also assisted us to further clarify & strengthen our contracts which has subsequently saved even greater costs in future contracts. CorGuv have a well developed process for keeping audit costs to a minimum whilst maximising benefits. In particular, they treat the whole process as a project, focusing on delivering value, including supporting us right up to the point where recovery negotiations are complete. In short CorGuv offer a compelling  blend of experience and commercial knowledge that delivers a complete service and I have no hesitation in recommending their services."General Services Manager, Apache North Sea Testimonial 18

  19. Strengtheningthe Pillarsof Business 19

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