Problem Identification: A Dispute
A new Standard Guidance (SG) had been published for 18 months and implemented as one of procedures to be followed by contractors. It covers a broad and various activities in capital expenditures which are cost recoverable: facility projects, oil well drillings and workovers, asset purchase on supporting equipments. In August 2013, it is recorded at about 75% of submitted proposals concerning oil well drillings and workover activities are approved, and the rest are being evaluated. The performance of approval process itself is 98% within schedule. While many of the contractors find the SG is useful and helps them organized in claiming their capital expense, some are reluctant. Unfortunately, they are those who provide the largest revenue contribution. The root cause of this is a clause stating the “effective date” of certificate is interpreted differently. Therefore, decision shall be made by management board to resolve the dispute.