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BuyTrain News

May 2011

Education
  ISM News
Personal Development
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Software_Tips
Hotlinks

Personal Safety Thought:

When using power tools, it's just as important to know when to stop as it is to start off safely. Once you get tired, the tool has the advantage and accidents are likely to occur. When I start making careless mistakes, or dropping things,  I know it's time to take a rest.

Education

Conference

The Oregon Mid-Valley Purchasing and Supply Management Association is excited to announce the 68th Pacific Northwest Purchasing Conference  to be held at the Embassy Suites Hotel in Portland, Oregon from October 24 -26, 2011.   Read More....

This Conference will be focused on educational learning opportunities which will allow each attendee to be able to add value to their own personal professional knowledge and skills while enhancing their company’s profitability.  This Conference will also provide an excellent opportunity for continued networking with your professional peers from  all over the Pacific Northwest region.  We are planning a minimum of 24 educational programs for you to select from.

More information will follow soon. Mark your calendars so that you will not miss out on this exciting educational event which is being specifically organized for everyone working in or with the purchasing and supply management profession!

Here is the latest Conference information.... If you have any questions, please do not hesitate to contact our Conference Co-Chairs:

Ron Brown, C.P.M.  or  Sid Brown, C.P.M., A.P.P. sidbrown@aol.com      

Contract Enforcement

Interesting article form the Internet Law Journal.   Provides some ideas about contract formation. In this case the buyer succeeded in avoiding a contract enforcement action brought by the contractor. Of course, if the facts are correct, the Buyer would have also been unable to enforce the contract.

http://www.ibls.com/internet_law_news_portal_view.aspx?s=latestnews&id=2429 

Important:  I am not a lawyer (thank God!),  these are just my non-legal-opinion comments.

Article

Observations
In the United States (U.S.), and most countries in the world, a contract is formed when a party extends an offer and the other party accepts it, and both parties agree on the object and price. These basic contract concepts have been applied to the world of electronic contracts. In the U.S. contract law is a state matter, although the Uniform Commercial Code (UCC) codifies the leading commercial law principles applied in this country. Thus, when analyzing any electronic contract, one must refer to the state law on the subject to determine if there is a valid contract between the parties.  An emerging interesting issue regarding electronic contracts arises when the parties agree on a contract, but the contract also includes some terms and conditions delivered to the offeree as an attachment. Is this attachment binding? This article provides an example of a Louisiana case dealing with this specific issue.

Question:  

 If the UCC, as adopted by each State governs contract formation, what law applies when the contract is formed between international trading partners?

 Boils down to: What does the contract say about which laws apply and what agreement do the International Trading Partners have about applicable contract law?
read more...

 UCC applies to the commercial acquisition of goods. If the contract is for services, common law applies (although probably similar issues for contract formation questions). This case appears to be about services.

 Federal Law applies to government contracts, to the extent that a different process is agreed to in lieu of the UCC (although probably similar issues for contract formation questions).
In Baker Hughes Oilfield Operation v. Flash Gas & Oil Southwest, Inc., Civil Action No. 04-2295 (2007), a U.S. district court denied plaintiff's request for partial summary judgment in a lawsuit against the defendant in which the plaintiff claimed damages as part of the contract’s terms and conditions that were sent as an attachment to the defendant. Baker Hughes, hereafter the plaintiff, filed a lawsuit against the defendant, Flash Gas & Oil Southwest, Inc., claiming payment for damages, interests, and attorneys’ fees allegedly owed to them by the defendant according to the terms and conditions (TACs) of the contract.

 According to the plaintiff, the TACs were part of the contract and were sent to the defendant as an attachment via e-mail. The defendant argued that these damages were not permissible under the contract and that the TACs were never sent to or received by the defendant. Thus, the question of fact for the court was to decide whether the TACs allegedly sent to the defendant as an attachment in an e-mail were part of the contract, if in fact they were sent.

The plaintiff is an oilfield service company that furnishes labor, equipment, machinery, material and several services in support of drilling, development and exploration of oil and gas wells.   The defendant is an operator of certain oil, gas and mineral leases and wells.  The defendant contacted the plaintiff and requested their services to be performed in Louisiana. After a conversation between the parties, the plaintiff prepared a proposal, including the schematic and pricing for the completion services and sent it to the defendant along with an attachment that contained the contract’s TACs.

Plaintiff = Seller

Defendant = Buyer

 

The Seller says “I sent the terms with the proposal”

The Buyer says, “ I never got it”

 

Now the Seller wants to hold the Buyer accountable for the terms of the contract. The Seller is asking the court to “enforce” the contract terms which they claim were part of the proposal and part of the resulting contract.
Plaintiff claimed the TACs were included in an Excel workbook that contained all the information concerning the proposal. Some of the TACs stated that the defendant would be bound by the TACs if the plaintiff was to perform the service, and that the defendant agreed to those TACs. The plaintiff alleged that shortly after having sent this e-mail with the proposal and the TACs, the defendant called the plaintiff and asked them to perform the job. Thus, the defendant technically accepted the proposal. The defendant claimed that the parties did agree on a contract, but that he never received the alleged e-mail with the proposal and the TACs. Further, the defendant claimed that it was not bound by the TAC because they were never accepted.  The defendant then filed some counterclaims, not the object of this article.  

The Seller says “I sent the terms with the proposal”

The Buyer says, “ I never got it”

 Question: When the Buyer placed the order (verbally or via email) what did the buyer cite as the contract terms? Sounds like nothing…

 The Buyer (defendant) says – “We did have a contract.  This covers the most important issue, “Was there a contract?”  Now the court just needs to decide what the contract said.
 

Important: If you want to ask the court to enforce the terms of the contract – you first have to prove a contract existed. 

The plaintiff presented some witnesses to prove that the e-mail was sent and that the TACs were part of the contract between the parties. After considering the parties’ arguments, the court held that it was undisputed that there was a contract between the parties, and that the contract might have been agreed on in an alleged proposed e-mail with an attachment that contained multiple provisions, or in any other way.  Thus, what are being contested in court are the terms of that contract. Then, the court said that the requirements of a binding contract under Louisiana are set forth in the La. Civ. Code Art. 1927 that states:

"A contract is formed by the consent of the parties established through offer and acceptance.

Unless the law prescribes a certain formality for the intended contract, offer and acceptance may be made orally, in writing, or by action or inaction that under the circumstances is clearly indicative of consent.

Notice that a contract can be formed by “actions” or “inactions”. Although, if you depend on performance to create the contract, it then leaves the question open about what the contract says.  Much better to have a signed agreed showing the contract terms.

 

 

 

Interesting point: You can have a contract for someone to “not take action”.  Example: “I will pay you $1000 to delay delivery of the truck (because I don’t have a place to store it yet).  Seller does not deliver. And thus a contract for $1000 was created.
Unless otherwise specified in the offer, there need not be conformity between the manner in which the offer is made in the manner in which the acceptance is made.”

Then, the court held that the circumstances do not clearly indicate that the defendant intended to accept or consent to the TACs.  Thus, summary judgment cannot be granted. The court specifically said: “[T]he parties each submit different versions of the facts relevant to whether Flash actually received the email and as to whether Flash received, saw and accepted the Terms and Condition attached to the email in Excel workbook format. There is no proof in the record that Baker actually sent the alleged e-mail containing the Terms and Conditions to Flash, and Flash, through its principal Steve Haller, denies ever seeing or accepting Baker Hughes' Terms and Conditions. A case in such a posture is not properly disposed of by summary judgment.”

It’s the old “battle of the forms”. Which terms apply if the seller’s form and the buyer’s form have different terms?  Under the UCC, the contract will consist of a combination of both, with some help from the court and the UCC to determine what happens to contradictory terms.

 Each form probably says – “This is the only one that applies”. It doesn’t really matter too much if the parties can not show an agreement.

 Problem: In international law does a contract exist if the two forms are different?  Does a contract exist if the Buyer and Seller cannot show specific agreement on terms?   This depends on the laws of that country.

 The Buyer won (luckily) because the Seller couldn’t prove the Buyer had ever seen the proposed terms.
There is no subsequent history for this case.  It seems that the parties might have settled their differences under this contract.  Yet, what one can learn from this case is that if one is to apply state law to prove that the terms and conditions of a contract sent via e-mail as an attachment are binding, one must have the evidence necessary to show that the offeree expressly accepted the terms of the contract incorporated in that attachment.  More than a legal question, this is a very factual question that comes down to be an evidentiary question in any case.

Important Point:  If you want to ask the court to enforce the terms of the contract – you have to prove the other party agreed to the contract and that those terms were part of the contract.

 1-      1. Prove there is a contract

2-      2. Prove what the contract says

 In this case either side might have won easily if they could prove what the contract did or didn’t say.  The buyer should have specified the contract terms when he placed the contract and/or the seller could have requested an acknowledgement of his terms.

Digital Image

One picture can be worth 1000 words. Keep in mind – today, digital images are so easy to capture and send. Accordingly it is reasonable to ask for pictures or even in some cases videos either as part of a proposal or as part of the contract performance. Here are some ways that pictures might be useful in the contracting process:

  • To show previous work or process capabilities
  • To highlight specific equipment, inventory  or facilities
  • To document finished work or show handling damage
  • To clarify a complex instructions
  • To demonstrate installation, operation or maintenance
  • As training programs

NOTE: Don’t forget to include the digital images in the record – if appropriate.

Pre-Award Information

We work hard at writing comprehensive SOWs for our contractors, so it’s easy to forget that we might have missed something important, or that the contractor may have misunderstood our requirements.  It’s also easy to forget that different contractors might have alternate methods of performing our SOW. { One offeror might elect to use explosive demolition vs mechanical }

Accordingly, it’s important to spend some time identifying the information we need from contractors as part of their proposal. In most cases we want more than just a price. We want the contract to provide enough information so we can be sure they understand our requirements and that we understand their proposal. Determining that a contractor’s proposal is responsive to our needs and that the contractor is a responsible entity is an important part of selecting the right contractor.

Proposal submittal requirements reflect the nature and scope of the work, but are separate from the SOW.  Here are some questions to consider asking the contractor to respond to in the proposal:

  • How do you plan to perform the work? Obviously we want a contractor to demonstrate they understand the SOW by providing a description which shows they understand and can comply with our requirements.
  • Are there additional hazards inherent in the work that we have failed to identify or will arise because of the way the work will be done?
  • Are there training, worker qualification or personnel requirements which are missing or in error?
  • Will you be bringing hazardous materials on site?  What, when, how?
  • Will your performance generate any hazardous wastes or have any environmental impact?
  • Will the work be performed using a QA program, certifications, licenses, specialized training, calibrated instruments, etc.
  • How do you plan to communicate the job hazards and work controls to the people who will be performing the work?
  • How do you verify that workers sent to my site are not abusing controlled substances or are illegal aliens?

Don’t forget to determine who, when and how the proposal information will be evaluated. Supporting organization technical personnel should be included in determining proposal submittal requirements and in proposal reviews.

Pre-Mobilization Submittals

There is a lot to do before contractors arrive on site to begin work. Depending on the nature of the SOW, it could be as simple as providing information about personnel, or it could be formal submittals requiring pre-work approvals. In either case, the pre-mobilization requirements should be identified in appropriately in the SOW, submittal register and/or work requirements documents.  Also, most importantly, if submittals- are requested, be sure to address and plan for how the submittal will be handled.  Here are some issues and examples to discuss with technical personnel during SOW preparation

  • When is the submittal required? Does it have to be reviewed and approved or is it just “for the file”?
  • Does it have to be received before mobilization? If so, when (x-days before start of work or ?)
  • Can any part of performance start before the document is approved? (Training, medical exams, or ?)
  • Who will perform the review and have we allowed adequate time to perform our review commitment without impacting the contract completion date?

Examples of submittal & review items to consider obtaining and reviewing before the kickoff meeting

  • DOT Licensing information for commercial vehicles and DOT licensed operators.
  • List of Chemicals that will be brought on site, including MSDS sheets
  • Safety equipment & PPE use/control/inspection
  • Instrument Calibration records
  • Hazard Communication plan

Personal Development

Professionals develop their own professional development programs! No one would want to use a doctor or a tax attorney who hasn't kept up with the latest advancements. Are we any different than them? We are, if we hope that someone else will take responsibility for our professional development. Read more.... Here is a different look at a strategy

My Resume... Note to Self

After listening to Executive Recruiter Leo Espinoza at the conference (see notes below), I think I'll download his presentation from the ISM web site and re-think my resume from the bottom up.

Professional Attitude

What feedback do you give your peers about educational events that you have participated in? By sharing and discussing we not only help our peers, but we clarify our own understanding and memory of the event. See an example below; my notes from the ISM conference which I shared with our office)

ISM News

ISM Leadership Training Workshop

This is by far one of the most valuable tools that ISM offers local affiliates. The Leadership Workshop brings people together from across the country to talk about leadership functions, issues and techniques. This year it will be in Orlando on May 13 and 14. I encourage affiliate to send a team of people. I also highly recommend that someone lead the team in planning how best to take advantage of the program, before they arrive. This is the ISM web site about the leadership workshop ( it's in the members only area).  Here are some notes and suggestions to share with people who are planning on attending

ISM Media Room Channel on YouTube
 http://www.youtube.com/user/ISMMediaRoom

ISM Conference Notes and Comments

On May 13-14, I participated in the ISM Leadership workshop with approximately 150 leaders of ISM affiliates from across the U.S. This year included “S.K.”, who is the president of the ISM affiliate in Korea and “Chris” who is the president of the newly formed ISM affiliate in India. Workshops and round table discussions included the mechanics of operating local affiliates as well as general topics of leadership skills, effectively using social media and web technology for communicating with members.

Lots of talk about the new ISM Corporate Membership program, wherein a large corporation can acquire ISM membership for all of the Corporate Supply Chain personal at a discount in one transaction. Agenda is attached and if you are interested, most of the presentation materials will be posted in the Affiliate Support section of the ISM web site. Agenda

We also stayed for 2 days of the ISM international conference. The event is huge – 2000 participants from all over the world. Large contingents from Korea, China, Japan and other countries.  If you have never been to one of the conferences, I highly recommend you make the personal investment to attend one. It helps to broaden your perspective about Supply Chain Management by meeting and talking with people from diverse organizations. Take a look at the conference videos (Daily Videos) to get an idea of the variety of people you’ll meet.

Conference next year will be in Baltimore, May 6-9.

 Spoke with several of the Scholarship winners. They are all very highly educated, articulate and motivated individuals who will be graduating with degrees in Logistics, International sourcing, and Supply Management. They will be the workforce competition of tomorrow. Winners

Chatted with several interesting colleagues, including Madison Goodwin, the manager of the HP Global eSourcing team. Interesting to hear her comments, and others, about international travel and barriers to locating and managing vendors in diverse countries.

Keynote address by the ISM BOD Chair Sidney Johnson who is the Vice President of Global Supply Management for Delphi Corporation. He spoke about his organization as being “GLOCAL”, a globally driven organization with local management. Delphi won an award for a software tool they implemented which allows Delphi management to find the Total Acquisition Cost for sourcing items and services in just a few minutes. Considering that the source could cover multiple countries and be shipped to factories located in 7 countries – the tool is powerful. It is one of the actions that he credits for helping take Delphi out of bankruptcy and back in to a competitive player. More than just GM, their customers now include many major corporations. His mantra for the Supply Chain team; “What do I know that is worth sharing?” Interesting question was asked – “What is Delphi doing to help with harmonization of internationals rules and regulations affecting the Supply Chain?” He sidestepped the answer.

Workshop by Wayne Evans, Head of Procurement Americas, DHL Global Business Services. Along with their solution contractor Emptoris, he spoke about extending the reach of procurement into complex spend categories traditionally not included in procurement scope ( such as legal services, benefits, insurance, etc.). The DHL supply chain organization includes 500 procurement staff, spans 45 countries and was responsible for over $10B in expenditures last year – not including transportation! Key points included:

a. Take care of procurement basics before trying to convince senior staff to allow procurement to get involved with other complex spend categories.
b. Identify the barriers and proactively address them before the question is asked. Why and how procurement can help should already be determined before starting the discussion.
c. Suggest becoming a “trusted advisor” to senior staff in order to gain acceptance for new ideas.
d. Interesting negotiation angle with Legal or HR: By teaming with procurement to issue the contracts for legal counsel and executive search firms, the Legal and HR organizations can remain the “good guys” to all their industry contacts while procurement takes the heat for negotiating price and contract terms. Use the good-guy/bad-guy strategy as a selling point to the customer who would want to be seen as the good guy in the negotiation process.

 Workshop by Leo Espinoza, Client Partner Korn Ferry International. Spoke about recruiting senior Supply Management Executives. Very articulate and knowledgeable about the profession, key supply chain issues, and the career market for executives. If you ever get a chance to hear him – I recommend.  Key points:
a. Briefly discussed awareness of career marketplace as described in Korn Ferry video, “ The Future of Talent” http://www.youtube.com/watch?v=H-JjE_uXaCA  (5 minutes and scary to watch)
b. Marketable executives have skills which include demonstrated experience with “transformational agendas”, “strategic skills”, “interpersonal leadership”, “and change management”.
c. Before you get called by a headhunter – be prepared with clear, compelling, crisp and
relevant examples of your accomplishments.
d. Rarely does an organization hire a senior management person to maintain the status quo.
More often the expectation is that the new manager will transform the organization and
implement changes.
e. Question: Does moving frequently or multiple times affect a person’s marketability? His
perspective: “You learn the business at the expense of your employer, show me when and
how you paid that back.”

 Keynote speaker, Daniel Burrus, Technology Futurist & Business Strategist, author and TV personality. Interesting to hear him talk about facing future and technology trends head on. Key points:
a. Don’t wait until the change happens – you know it is going to change, so start thinking about it now.
b. You are going to spend the rest of your life in the future – not the past.
c. Not enough time to spend thinking about and planning for the future – not a good excuse.
d. Before answering a business challenge with a “no” consider how much the “no” will cost.
e. Some changes are cycles; e.g. as baby boomers get older; they will get more conservative in their spending.
f. Some changes are inevitable; e.g. there will be gasoline-free ways of transportation implemented  someday.
g. Change in business is not always the same as “transformation”. Change can drive transformation or close a business that is not ready for it.
h. Question he asked the audience; “Do you think there will eventually be laws requiring some companies to keep telephone conversations as records?” Only a few of us raised our hands in the affirmative.
i. Handout

ISM Services Group sponsored a number of conference presentations. They are hosting a services conference in Arizona, December 1, 2. Attached is a page from their newsletter showing the topics they sponsored and the scholarship winners. Participating in a specialized group is one way to maximize membership. services.pdf

More info, videos and materials from the conference:
http://www.ism.ws/education/content.cfm?ItemNumber=21243&navItemNumber=5580

Software Tips

Sometimes Word text takes on a life of its own. Pasted text might include a number of obscure formats that you’d be better off without.  In those cases, I like to clear all the formatting and start with plain text, then add the format I really want.

 You have options:

  1. When pasting text from one document to another Use the Paste Special option on the Paste menu to paste text only – without the formatting.
  2. Highlight the text and on the Font menu select the CLEAR FORMATTING button ( it looks like an eraser with some letters)
  3. Highlight the text and use keyboard shortcut CTRL+spacebar
  4. For quick access add the Clear formatting button to your shortcut menu.
  5. Clear formatting from the whole document, by first using CTRL+A to select all text, then the clear formatting command.

 Once you have plain text, it’s easy to get the formatting of new text to match existing text in the document. Place the cursor in the properly formatted text and right click. In the menu select the format paintbrush. Then use the format paintbrush to highlight the text you want to format.

Hotlinks 

Thirsty?

 Check out my friends web site: www.blackheronspirits.com/

Provide Feedback and suggestions for future newsletters at any time. I'll try and use what I can.

I really do appreciate those of you who take the time to write and comment on this newsletter! As always, you are welcome to use my articles or presentations for educational purposes. Just as long as you are not charging for the materials and credit the source.  

TTFN, 

Mt

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