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Enron Mail |
FROM:??????????? Dana Gibbs
DATE: ??????????? July 19, 2000 RE:?????????????????? Contract Approval, AFEs and Consulting Arrangements ??????????? The following guidelines must be followed for all existing projects, as well as new contracts, AFEs and consulting arrangements.? Contract Approval ??????????? Effective immediately, all contracts must be approved by legal, with the final version of the contract initialed by legal prior to execution.? Exceptions will be limited to the execution of crude oil purchases and sales contracts that are on a pre-approved form and occur in the normal course of business.? Any other exceptions must be approved by the Office of the Chairman.? In order to ensure that we have a handle on existing contracts, please provide a copy of any finalized contract which legal did not initial prior to execution, but is currently in effect or not yet performed, to Molly Sample by July 25, 2000.? AFEs ??????????? Based on my review of the latest AFE report, EOTT needs to utilize this tool to better manage all of its expenditures for budget purposes to ensure proper prioritization of EOTT's cash.? Company policy requires that all expenditures greater than $5,000 that relate to expansion capital and maintenance capital are required to have an AFE set up prior to any expenditure.? I have asked the property accounting group to monitor compliance with that policy starting today and hold for payment any expenditures not authorized according to the policy.? Effective immediately, all employees will be prohibited from starting any project that does not have an approved and signed AFE.? In addition to ensuring that the current policy is strictly adhered to, the policy will be broadened to include a) expenditures for environmental expenses captured on the EMS Works system and b) the use of blanket AFEs for small recurring asset purchases such as computer equipment (computer equipment under $5,000 would be capitalized under these blanket AFEs and no longer expensed).? ??????????? In order to more accurately monitor existing AFEs, please be sure the following steps are taken for each AFE prepared by your department:? 1) obtain competitive bids prior to starting a project; 2) all projects for which costs are projected to exceed the approved AFE by 10% or $50,000, whichever is less, must have a supplemental AFE prepared and submitted for approval within 30 days of the projected budget overrun, and 3) any project that is in process and does not have an AFE must be put on hold until an AFE can be approved, and 4) any open AFEs that are fully completed (meaning all invoices have been received and routed for payment) must be closed.? A final capital and maintenance budget for all authorized (and still open) AFEs will be completed and distributed by July 25, 2000. ??????????? Please consult Joe Richards for information necessary to utilize the AFE System for all future AFE processing or for a copy of the AFE policy. Consulting Contracts and Service Contracts ??????????? Effective immediately, no new consulting arrangements may be entered into or extended without the approval of the Office of the Chairman.? Additionally, Human Resources/Administration must be contacted prior to entering into any consulting arrangements to 1) arrange for office space, if necessary for the project, and 2) to determine how the position should be filled (contract position, temporary employee, or permanent employee).? For all existing consulting agreements, please provide me with a comprehensive listing by arrangement, including terms and business rationale, by July 25, 2000.? Please contact Molly Sample to prepare a contract for any undocumented consulting arrangements.? Written documentation on all consulting/contracting arrangements must be maintained by Human Resources in the event of any governmental agency audit of EOTT's contract employees. ??????????? Contractors who provide various services, such as trucking, environmental cleanup, maintenance, etc. must execute a service contract and maintain a valid insurance certificate to remain on EOTT's approved contractor list, which is available on EOTT's Intranet.? Requests for service contractors must be sent to John Zimmerman in the Legal Department.? Please forward a request for contract to John for any service arrangements which are not documented by July 25, 2000. Accounts Payable Documentation ??????????? Please be reminded that the Accounts Payable Department requires complete and timely documentation for all invoices submitted for payment.? This includes all charges made using a P card.? Incomplete invoices or copies of invoices will be returned to the submitting party.? For service contracts, a summary of hours, hourly rate, and a brief description of the work performed by person, by date, and by project, along with documentation to support specific authorized out-of-pocket expenses, must be submitted before payment can be made.? For materials, a comprehensive description of all items, including the quantity purchased, must be submitted before payment can be made.? ??????????? Please notify the appropriate people in your respective departments of these procedures and contact me if you have any questions or comments.
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