Question

Please consider the following, and offer three (3) responses between one (1) and three (3) sentences in length.

Scenario: You read in the local newspaper (ok, probably on your iPhone) that Genitempo-Cardoza Drilling (GC-D), the division of PEMEX specializing in light, sweet crude, has tapped another substantial deposit. This discovery and access means major profits for GC-D, and also new contracting opportunities for various support companies. Schlumberger and Morgan-Ali-Perry Corporation (MAP Corp) are competing to provide cementing field services and related support. You are a consultant to GC-D and MAP Corp and have been given a waiver (possible conflicts of interest, right?) to advise both clients in a joint meeting on three (3) issues.

If GC-D contracts with both Schlumberger and MAP Corp to provide services as independent contractors:

1) Should GC-D carry both Schlumberger and MAP Corp under its employment insurance?

2) If Schlumberger is providing only labor/people to operate and MAP Corp is providing only equipment, will Schlumberger and MAP Corp need to establish contracts with each other/between their two companies, or just GC-D independently?

3) If MAP Corp is shipping its equipment from its Texas base to Mexico, what entities (government and private) might be involved in that transfer?

Answer 1

1. The answer to this question is YES.

Under AS – 7 Construction Contracts, it is stated that the client (or contractee) can outsource its work to any number of contractors. The clause of carrying insurance cover of each contractor, is though, the contractee’s choice, still it is advisable to have it for all.

2. The answer to this part of the question is NO.

Reason: Both the contracting companies, namely Schlumberger and MAP Corp are providing items of different nature to their client, i.e., GC-D. While the former is providing labour (human resource) for the task at hand, the latter is providing the equipment to be used by those people. They are in no obligation to bind themselves into a contract for such a thing.

However, they may add a clause in their respective contracts with GC-D, stating the well-being of the human capital (labour) and equipment to be closely monitored so as to determine settlements later on.

3. The international transfer between United States and Mexico will include export-import agencies of both the countries.

Government:

Bureau of Industry and Security (BIS)

Department of Treasury – Office of Foreign Assets Control (OFAC)

Other departments like DOJ, Homeland Security (Customs & Border Protection)

Compliances laid down by Mexico’s IMMEX program must be fulfilled.

Private partners are involved such as logistic companies and other agencies which facilitate export-import procedures.