Operating today’s refining and petrochemical facilities at peak efficiency requires the use of the most advanced analytical tools available to plant management. One key area that can enhance financial performance is the evaluation and control of the contractual relationships that represent a major portion of operating and capital expenditures. AMS-PAR can provide the reliable expertise that your plant management team needs to assess and optimize contract-based expenditures.

We will determine where profits are being lost to vendor overpayments and contract misinterpretations. This allows your facility to recover those payments and apply them to your bottom line. With our analysis and recommendations, you can be confident that your major maintenance agreements, turnaround and construction contracts are functioning properly and fully protecting the interests of your plant.

An AMS-PAR review will provide:
  • Contract compliance assessment
  • A self-funding review of contracting procedures and accuracy
  • Minimal client staff involvement
  • Detailed reporting of findings
  • Recommendations for improvements in processes and procedures

Refining/Petrochemical

Vendor/Supplier Review

Given the steady rise in maintenance, fuel, and feedstock costs, it is increasingly important for refinery and petrochemical companies to carefully monitor and control their contractual relationships. Most of these companies have seen significant increases in spending, but few are adding staff to track and control these increasing costs. As the spending grows, so does the need to have contracts analyzed for compliance with their terms and conditions. In today’s multi-million dollar contract environment, even small interpretational errors by a vendor can create large overpayments. Agreements that in the past were too small to warrant review are now substantial enough to receive attention.

For over 25 years, AMS-PAR and its staff have helped refining and petrochemical companies monitor their costs. A comprehensive AMS-PAR vendor review program will determine the current level of contract compliance of key suppliers without adding additional burden to existing staff. We will examine the agreements which are the basis for the refinery and petrochemical facility’s commercial relationships, verify that the resulting invoice activity complies with the terms of the agreements and confirm that payments made under the agreements are accurate. AMS-PAR will also assess compliance with your business ethics policy. Our reports provide sufficient detail to facilitate collection of erroneous payments. We also make specific recommendations to improve contracting procedures and contract management processes to ensure that these errors do not recur.

AMS-PAR conducts a wide variety of reviews for the refining and petrochemical business sector. Common types of compliance reviews include:

Material suppliers
Service suppliers
Turnaround services
Engineering and environmental service providers
Construction contractors
Business ethics

Project Construction Review

With the costs of annual maintenance and new construction reaching more significant levels, many facilities are seeing contract-based expenditures at levels never experienced before. In this high-dollar environment, it is vital to have processes in place that provide your facility’s management with the assurance that contractors and subcontractors are complying with their contractual obligations. In projects where even small misinterpretations can mean very large overbillings, contractor compliance reviews are a necessary component of prudent risk management and post-procurement processes.

An in-depth review of major maintenance spending and the use of post-construction contract compliance assessments yield a valuable opportunity to detect control weaknesses, close gaps on future contracts, and recover lost profits. In our typical reviews, recoveries are made in areas like improper billing for contractor time, inappropriate mark-up of costs, and rebilling for items that are contractually covered by overhead. AMS-PAR’s professional staff will carefully analyze payment processes and provide recommendations for contracting and payment process improvements.

Accounts Payable Review

Accounts Payable departments operate in a complex environment with both intra-corporate and external factors impacting their performance. AMS-PAR recognizes that each client has distinct needs and varying capabilities to support a post-payment transaction analysis. In spite of these differences, one overriding factor is constant: today’s business demands that all assets perform at their maximum efficiency, and the A/P Department is no exception.

AMS-PAR can provide the client with a comprehensive examination of the A/P function. This detailed look will recover revenues lost to vendor overpayments, mispayments, and contractual misinterpretations. AMS-PAR’s experienced team will also analyze the root causes of these inaccurate payments and give substantive recommendations regarding process and procedural improvements, which can prevent the recurrence of these errors. AMS-PAR will help ensure your payable processes are functioning at peak efficiency.

We will provide written and electronic reporting data to support our analysis. Your report will detail each discrepancy, its root cause, the vendor’s recognition of overpayment, and recommended actions for preventing future discrepancies.

Your AMS-PAR team will review all areas where inaccuracies can occur in their search for discrepancies. These areas include:

Vendor master file
Purchasing
Receiving
Returns
Capital expenditures
Tax and regulatory issues
Contracts
Internal controls

Licensing Review

For those holding licensing agreements, one particularly difficult area to administer is the verification of a licensee’s compliance with the terms of the licensing agreement. Evaluating compliance is a prudent business practice that will examine the licensee’s adherence to their reporting and property protection responsibilities.

AMS-PAR validates the revenue generated from your intellectual property and confirms that the payment stream and all other performance by the licensee comply with the agreement. Our engagement findings are presented to you in a detailed report that sets out the underpaid licensing revenues, as well as identifying any other areas in which the licensee is not in compliance. The report will recommend improvements in the contract language to strengthen your position now and in future agreements. At your request, AMS-PAR will assist in the negotiation of a settlement of these contractual shortfalls.