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The purpose of this procedure is to describe the system of

handling field changes.

This procedure defines the minimum requirements inprosecuting changes in the contract scope of work and other

item defined in Section 2.0 of this procedure.

The scope of this procedure covers any CHANGES in thework or any part thereof, ordered by COMPANY, in writing,

during the currency of the project.

COMPANY Change Orders covers the following items:

Any addition, omission, substitution, modification oralteration of the work.

Changes in the character, quantity, kind or

performance of any part of the work.

Adjustment in the CONTRACT Schedule.

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(continuation)

MMG proposed CHANGES, approved by

COMPANY, Changes necessary to a safe,

efficient, orderly or timely performance of

the CONTRACT.

Any written instructions or decision

received by MMG from COMPANY which

constitute a CHANGE, duly notified within the

period stipulated in the contract and justified

by the COMPANY with an approved CHANGE

ORDER.

Any other CHANGES identified by MMG and

properly notified to and justified by the

COMPANY.

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CHANGE NOTICE

A notification letter initiated by MMG, address to the COMPANY for any

recognized requirements or identified changes in the work which is not part

of the contract scope, or an alteration in the performance of the work (This

does not include quantity and cost)

CHANGE REQUEST

Is format No, END-4-004C used by MMG initiated Changes. The format contain

the Change Notice Number, Work Description, Estimated cost, Schedule

Impact, Reference, and the corresponding Attachments (Worksheet, Quantity

Comparison Sheet, and other applicable supporting documents) COMPANY

initiated Change Request will use own COMPANY originated format.

CHANGE ORDER

Is a negotiated additional WORK ORDER issued by the COMPANY to MMG for

the performance of specific work such as changes in the scope of the work,

extra work orders, change in the mode or method of prosecuting the work,

and other items not covered by the contract as defined in Section 2.0. SCOPECOMPANY

Various clients for whom MMG provide products or services.

AMENDMENT

Means any written alteration of the contract expressly designated as an

amendment and signed by both the COMPANY and MMG.

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REFERENCES

Controls Procedures No. PCD-3-012

Contract Variation / Change Order Reports

PROJECT MANAGER (MMG)

Administrative supervision of the Field Engineering Support Group which

includes processing of Changes and negotiation of Change Order price with

the company.

FIELD ENGINEERING MANAGER (MMG)

Directly under the administrative supervision of the Project Manager and

functionally reporting to the Chief Engineer in Dammam, MMG Head Office.

Provides Engineering assistance to the Project Manager in the overall

operation of the project, and handles the quantity and cost estimates for

generated project CHANGE ORDERS.

Review Changes, determine contractual status, negotiate with COMPANY forquality variation and cost of CHANGE together with the Project Manager, and

issue to Project Operations the approved Change Orders for implementation.

FIELD PROJECT CONTROLS DEPARTMENT PERSONNEL

For responsibilities, refer Project Controls Procedure, PCD-3-012

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CHANGES may be instigate by either the COMPANY or MMG. In practice,

many of those noted by MMG will be initiated by MMG.

MMG Field Engineering receives all incoming construction documents fromthe COMPANY address to the Project Manager. MMG Field Engineering

Manager directs the immediate verification of all drawings and specifications

and compares them to the previous issue.

Project Manager and Engineering Manager will review all identified potential

CHANGES and a decision will be made as to whether grounds for a CHANGE

ORDER exist.Should this exercise identify a potential CHANGE and if it is decided to

apply for a CHANGE ORDER, MMG Field Engineering will designate a CHANGE

ORDER exist.

The Engineering Manager prepares the CHANGE NOTICE letter and forward

to the Project Manager for approval. This is then recorded by MMG Project

Document Controller and finally forwarded to the COMPANY for review and/orapproval. CHANGE NOTICES shall be instigated by MMG within the period of

(20) twenty calendar days or agreed specified number of days from dates of

receipt of instruction or decision constituting a CHANGE.

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(continuation)

Field Engineering will complete a Quantity Take-Off Worksheet (Form No.

END-4-001A) for both the previous and current drawings issues. The cost

shown on this Worksheet will be derived from the Contract, and reflect costor credit to the company.

Quantity differentials between the two issues will be summarized on the

Quantity Comparison Sheet (Form No. END-4-004B)

When MMG receives from the COMPANY a confirmation for the CHANGE ,

MMG will submit the CHANGE REQUEST including the estimated quantity

and cost evaluations to the company.

However, in the event where the evaluated cost of the CHANGE is

ONE HUNDRED FIFTY THOUSAND Saudi Riyals and above (SR

150,000.00) the Field Engineering will forward first the CHANGE

REQUEST together with all supporting documents to Engineering

Department Head Office in Dammam through the Vice President

Construction and Marine for final review, check and approval beforeit is finally submitted to the COMPANY.

After reconciliation of quantities, and cost negotiation, MMG and

COMPANY reached an agreed price, the COMPANY issues an approved

CHANGE ORDER to implement the work.

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(continuation)

COMPANY at anytime may direct MMG to make CHANGES, when such

CHANGES occurs, COMPANY will sets forth in writing, the nature of the

CHANGE in own COMPANY Change Request format. This is then forwardedto MMG for negotiation. Upon agreement of price, the COMPANY will issue a

CHANGE ORDER for implementation.

In no event, however, will MMG proceed with the work involved in the

CHANGE without an Approved CHANGE ORDER or an Amendment.

However, in cases, where COMPANY requires MMG to proceed with the

work involved in a CHANGE without an approved CHANGE ORDER,COMPANY shall issue a written instruction to MMG to proceed with the

work. Immediately, however, Company shall advise MMG to submit the cost

evaluation for the CHANGE. Negotiation for fair and agreed cost will follow.

COMPANY will issue approved CHANGE ORDER for the CHANGE already

performed for settlement.

In rare cases where a dispute occurs between the client and MMGsinterpretation of a proposed CHANGE ORDER, the matter will be referred

to MMGs Contract Department who will make further negotiation with

COMPANY for resolution. The period to negotiate the Change by both

parties shall adhere to the specified provision of the contract or period

agreed by both parties for settling CHANGES under dispute.

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PROJECT FIELD ENGINEERING

TASK TITLE

FIELD CHANGE

(END-3-004)

FIELD ENGINEERS

FIELD CHANGE INITIATED BYMMG

Check incoming drawings /documents for change (Quantity/

cost impact)

FIELD ENGINEERS

Perform quantity estimates toestablish quantity differences

(END-4-004A)

SUPERVISING ENGINEER

Prepare / submit ChangeNotice address to Costumer

(END-4-004C)

COSTUMER

SITE CTD & PCD

Review all identified potentialchanges / Change Requestfor Contractual Obligation

and Schedule Impact

END / CTD

Submit further substantiation

to Costumer if there stillground for a Change Order

exist for resolution

PROJECT MANAGER /SUPERVISING / CTD REP.

Negotiation of quantities and

final price with the Costumer

SUPERVISING FIELDENGINEER

Prepare / submit Change

Request to Costumer(Quantities/cost)

SUPERVISING / FIELDENGINEERS

Check all drawings /document related to the

Change Order initiated byCostumer

FIELD ENGINEERS

Perform Quantity & CostEstimates

(END-4-004A)

SUPERVISING FIELDENGINEER

Submit Change Request toCostumer to include

estimated Quantities & TotalCost (END-4-004C)

SITE CTD & PCD

Reviews all Change Orderinitiated by Costumer for

Contractual Obligation andSchedule Impact

PROJECT MANAGER /SUPERVISING / CTD REP

Negotiation of Quantities &final price with the Costumer

START

REJECTEDCOSTUMER

Issue/approvedChange Order

COSTUMERInitiate a

Change Order

COSTUMER

COSTUMERIssue Approval

Change Order

A2END

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FIELD CHANGE REQUEST INITIATED BY MMG (Contractor)

MMG Proposed CHANGES approved by Costumer, CHANGES

necessary to effect a safe, efficient, orderly or timely performances

of the contract. Any other CHANGES identified by MMG and properly notified to and

acknowledged by the Costumer.

Verify / check all incoming construction drawings, specifications, and

documents issued by Costumer at the site for any Changes (Quantity /

Cost impact) and perform quantity take-off estimates, using Form No.

END-4-004B Quantity Comparison Sheet

END / CTD / PCD shall review all identified potential changes and

decision will be made as to whether grounds for a CHANGE ORDER

exist, contractual obligations and schedule impact. Should this

exercise identify a potentials Change and if it is decided to apply for a

Change Order.

Prepare a Change Notice Letter and designate a Change Notice

Control Number. The Change Notice Letter is then forwarded to the

Project Manager for his approval / signature.

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FIELD CHANGE REQUEST INITIATED BY MMG (Contractor)

(continuation)

Transmit the Change Notice letter to Costumer, Change Notices

shall be instigated by MMG within an agreed specified number ofdays, from date of receipt of instruction or decision constituting

a CHANGE.

Upon receipt of confirmation (YES) from the Costumer, MMG shall

submit CHANGE REQUEST which includes estimated quantities

and cost evaluation (Changes in excess of SR 100,000.00) shall be

reviewed/checked by END Head Office prior to submittal toCostumer.

Negotiation of quantities and final price upon advise by Costumer

representative. An approved CHANGE ORDER is then issued by

Costumer for the negotiated price.

If the Change Notice is rejected by Costumer, Furthersubstantiation will be submitted if there is still ground for

resolution. In rare cases where a dispute occurs between MMG and

Costumer, Contract Department who will further negotiate with

Costumer for resolution.

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FIELD CHANGE REQUEST INITIATED BY COSTUMER

Any CHANGE in the work or any part thereof, ordered by Costumer in

writing, during the duration of the project. Costumer CHANGE

ORDERS will cover any addition, omission, substitution, modification or

alteration of the work, changes in the character, quantity, kind or

performance of any part of the work and adjustment in the Contract

Schedule.

Any written instructions or decisions received by MMG from Costumer

which constitutes a Change in the scope, notified within the period

stipulated in the Contract shall be authorized by the Costumer with an

approved Change Order.

Review the Costumer Change Request and perform quantity take-off and

costing based on available information and drawings provided by

Costumer.

Supervising Engineer shall review the quantities and costing made by

the Estimating Engineers. Make necessary adjustments / corrections, if

any.

If the total cost of the Change is more than 100,000.00 SR, the Change

Request computation is forwarded to END Head Office for evaluation. Final

costing is then finalized for submission to Costumer. Copy of the Change

Request is provided to Site PCD & CTD for evaluation of Schedule Impact

and Contractual obligation. Costing is then finalized for submission to

Costumer.

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FIELD CHANGE REQUEST INITIATED BY COSTUMER

(continuation)

Final CHANGE REQUEST is then approved by the Project Manager

and transmitted to Costumer.

Transmit the CHANGE REQUEST to Costumer, which includes

Summary of Quantities and Cost.

Costumer will review & evaluate the Change Request quantities and

cost, After evaluation, Costumer will advise MMG for a meeting to

reconcile any questions / cost differences in computation conductedby both parties. After reconciliation of quantities and unit price

agreed, negotiation for final price will follow. Costumer will then

issue an approved CHANGE ORDER for negotiated final price.

If the Change Notice is rejected by the costumer, further substantiate

will be submitted if there is still ground for resolution. In rare cases

where a dispute occurs between MMG and Costumer of the proposed

Change Order, the matter will be referred to MMG Contract

Department who will further negotiate with Costumer for resolution.

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