Cenovus Supplier I nform ation Session

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Kelley Williamson
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1 Cenovus Supplier I nform ation Session SCM Cenovus Issued Commitments and Invoicing Supply Chain Management November 21 and 28, 2012

2 Agenda Introduction What s Changing and Why Terminology Commitments What s new Receiving LEMS Invoicing FAQ s Address Change Contact Information

3 What s Changing and Why? Supply Chain has im plem ented a JD Edwards (JDE) enterprise solution Purchasing & Contracting docum ents will be created, approved, and stored electronically Allows us to scale up procurem ent to support Cenovus growth Changes to the process of issuing com m itm ents Changes to how invoicing works These changes relate to Cenovus-issued contracts or commitments only and have no impact on existing processes for com m itm ents issued on behalf of Cenovus by any EPCM or Environmental Firms. These changes do not affect existing Cenovus- issued contracts or com m itm ents created prior to going live with the new system.

4 First, a bit of com m itm ent term inology 4

5 Stream lining our contracts and com m itm ents 5

6 Com m itm ents: What s New All com m itm ents, contracts and change orders are executed by Cenovus first (electronic signature), then the supplier Cenovus will send out a draft version of the contract for review only if required Supplier is not to alter the signed commitment or contract. Supplier will need to verify their address on the contract or commitment. The signed commitment received from the Cenovus commercial contact must be circulated to the person with appropriate signing authority in their organization. Financial coding is no longer referenced on Com m itm ents, RFI s, and LEMs. These changes do not affect existing Cenovus- issued contracts or com m itm ents created prior to going live w ith the new system.

7 JDE Com m itm ents Order # Line #

8 Receiving What s New There are now controls in place to ensure the am ount of m aterials or services provided m atch the com m itm ent. The system does not allow overages and m ay delay invoice paym ent Solut ion! For anticipated overages, discuss the need for a change order with your Cenovus Com m ercial Contact as specified on your contract.

9 LEMs What s New LEMs are sim ilar to a work ticket that represent Labour, Equipm ent and Material charges. (Not applicable to all Cenovus Suppliers) Cenovus treats LEMs as a form of receipt against commitments. All LEMs are required to reference the JDE com m itm ent number and line item number(s) The system will not allows LEMs to be entered if line item total is exceeded. SCM will reject LEMs that exceed line item total. Orders and Change Orders m ust be approved by both Cenovus and the Supplier before LEMs can be received/ entered into JDE.

10 LEM s Ticket Exam ple Order No TRUCKS R' US DATE: October 11, 2012 LEM No. TRU1234 Labour (Line 1) RT (RT Rate) OT (OT Rate) Hours Total Dollar Total John Doe 8 $ $ $ Jane Doe 8 $ $ $ Paul Smith 8 $ $ $ Paulette Smith 8 $ $ $ Totals (Line 1) 32 $ 1, $ $ 2, Equipment (Line 2) RT (RT Rate) OT (OT Rate) Dollar Total Truck # $ $ $ Truck # $ $ $ Totals (Line 2) 16 $ $ $ Materials (Line 3) Rates Dollar Total Blankets $ $ WD-40 $ $ Totals (Line 3) $ $ LEM SUMMARY: Line 1 - Labour $ 2, Line 2 - Equipment $ Line 3 - Material $ Total Value: $ 3, Description of work: Worked on the two trucks on site, sprayed some WD-40 on some squeeky hinges. Put some blankets down.

11 I nvoicing: What s New Suppliers m ust quote the JDE order num ber and order line item number on all invoices Each Cenovus commitment must be on a separate invoice. Provide the commitment number on all invoices include the line num ber (s) for Purchase Order, Contract, and Contract Release docum ent types; not Master Service Order Financial coding has been replaced with standard dum m y coding except MSO where traditional financial coding is required. When there are charges not specified on the order, work with the Cenovus commercial contact to arrange for a change to the order prior to invoicing. This would likely add a line num ber to the existing order which m ust be referenced on the invoice. Detailed invoice submission instructions will be provided on each Cenovus- issued commitment.

12 JDE Com m itm ents Order # Line #

13 Sum m ary of Open I nvoice I nstructions I f a contract, contract release or purchase order : I f Cenovus Energy I nc., cost centre is PRCH2 I f Cenovus FCCL Ltd., cost centre is PRCH3 I f Cenovus TL ULC., cost centre is PRCH4 Major/ Minor/ Subcode (open invoice) is always (for all companies) PO/ SO: contract, contract release or purchase order num ber as shown on commitment PO/ SO line: as shown on com m itm ent

14 Exam ple Com m itm ent (Contract Release)

15 Exam ple Mast er Service Order

16 FAQ s I nvoicing 1. Question: I'm an integrated vendor using XML file format. Will I be impacted by this change? Response: Yes. Please contact ADP Support (adpinvoicesupport@adp.com) and ask for information regarding the "PO / SO" and "PO / SO Line" values. 2. Question: Are there any integration formats that are not currently supported? Response: No, all integration types are now supported on the ADP platform. Contact ADP Support (adpinvoicesupport@adp.com) to obtain updated templates or xsd file. 3. Question: My current com m itm ents don t have line num bers Response: All commitments (POs, Contracts, etc..) issued prior to Cenovus going live on the new system are not impacted and are expected to be invoiced as per the current process.

17 FAQ s I nvoicing 4. Question: Do I have to supply invoice coding when submitting invoices for the new Cenovus- issued Contract, Contract Release, and Purchase Order? Response: All invoiced charges for these types of documents should use a cost centre of PRCHx (where x = 2, 3, or 4) with the "place holder" Major/ Minor/ Subcode of Question: How can I ensure that my invoices won't be disputed and will be processed in a timely fashion? Response: Follow invoicing instructions (provided on each Cenovus-issued commitment) carefully and be sure to construct your electronic invoice to match how Cenovus has received this information in our new centralized procurement system (JDE). This may involve further communication with your SCM commercial contact on site to understand our receiving process. 6. Question: What is the PRCHx code? Response: PRCHx (where x = 2, 3, or 4) is expected in the Cost Centre field with the "place holder" Major/Minor/Subcode of PRCH = Purchase PRCH2 = Work performed for Cenovus Energy Inc. PRCH3 = Work performed for Cenovus FCCL Ltd., As Operator for FCCL Partnership PRCH4 = Work perform ed for Cenovus TL ULC, As Operator for Telephone Lake Partnership

18 FAQ s I nvoicing 7. Question: Does this mean that for each of the line items in our invoices we will need to provide a PO line number? Response: Possibly. It depends on the nature of the Order you would receive from Cenovus. Contact your SCM Buyer to discuss the Order Types you may be issued in the future. 8. Question: Will this impact all work issued on Cenovus properties / assets?" Response: No, this only applies to commitments issued directly from Cenovus. This does not apply to any commitments issued on behalf of Cenovus by an EPCM or Environmental Firm 9. Question: Are there any other changes to my invoice submission instructions (ie: Invoice Description Field, Work Order values, etc.) Response: No, unless otherwise instructed, all other invoicing instructions remain the same.

19 FAQ s I nvoicing 10. Question: Answer me this: If I submit 3 LEMs tickets containing two lines each, how many line items will be on my invoice? Response: Assuming that our SCM team has received each line item independently, your invoice will need to contain 6 line items. Invoice Line 1: Referencing Commitment Line 1 with a dollar amount to match the 1st LEM ticket. Invoice Line 2: Referencing Commitment Line 2 with a dollar amount to match the 1st LEM ticket. Invoice Line 3: Referencing Commitment Line 1 with a dollar amount to match the 2nd LEM ticket. Invoice Line 4: Referencing Commitment Line 2 with a dollar amount to match the 2nd LEM ticket. Invoice Line 5: Referencing Commitment Line 1 with a dollar amount to match the 3rd LEM ticket. Invoice Line 6: Referencing Commitment Line 2 with a dollar amount to match the 3rd LEM ticket.

20 FAQ s Procurem ent/ Receiving 1. Question: LEMs-Now that commitments will be tracked in a centralized enterprise system, can we expect the implementation of an electronic LEMs system or any other enhancements to this process in the near future? Response: Cenovus has successfully piloted an electronic field ticketing platform, OI Receipt (module within OpenInvoice platform). At this time, there are no formal projects or timelines established for implementation. 2. Question: Can we expect RFI / Change Order turn-around times to be within an hour of submission? Response: Both our suppliers and Cenovus must adopt a more proactive approach to anticipate when RFI / Change Orders are required. 3. Question: Will previously issued CWAs be converted to commitments within this new format? Response: No. All commitments that have been issued in the past are expected to processed as per usual until they expire or SCM decides to convert them. 4. Question: Do I need multiple RFIs if changes are required on multiple commitment line items? Response: No. Only one RFI is required, which will need to clearly reference each commitment line item involved. be

21 FAQ s Procurem ent/ Receiving 5. Question: Occasionally I receive ad-hoc work requests while I'm already on-site for other work. How will these new system generated commitment requirements impact this type of work request? Response: Work with your SCM commercial contact to work out a solution that will be effective for the unique circumstances for each scenario. 6. Question: Will every RFI submission be returned as a change order? Response: No. If the RFI meets the criteria for a change order e.g. funds change on a specific line number (for specific criteria work with your commercial contact) and Cenovus approves it; a change order will be sent to the supplier. 7. Question: Are we being forced to track our costs and schedule to better predict when an RFI will be required? Response: Cenovus asks that you track your costs appropriately in order to anticipate when an RFI may be required to complete your work. The more proactive our suppliers can be at subm itting RFI s, the less likely there will be any delays in ticket processing and invoice payment due to system constraints.

22 FAQ s Procurem ent/ Receiving 8. Question: You said that there will be no tolerances allowed (by a system control) during the receiving process; how will this impact pipe deliveries? Response: There are some financial and quantity tolerances built in to the system to allow for delivery of pipe, cable, and other length-based materials. Cenovus is expecting delivery to match the commitment. 9. Question: Will there be an opportunity to send RFIs through a similar electronic approval process before they are converted to a Change Order? Response: Not at this time, but is currently on the future enhancement list. 10. Question: Will there be an opportunity to send commitments and RFIs to our suppliers for electronic approval? Response: At this time there is no plan for suppliers to perform electronic approvals. 11. Question: Can I bundle multiple RFIs in to one single Change Order if they are all related to the same commitment? Response: Yes. This is technically possible where it makes good business sense to do so.

23 FAQ s Procurem ent/ Receiving 12. Question: Do we issue a stop-work if we're waiting on an RFI to be approved and a change order to be issued? Response: You will need to work closely with your SCM commercial contact. 13. Question: Is the LEMS Data Summary LDS process still applicable after this change? Response: This will continue. 14. Question: You've said that commitment line 1 won't always represent the same type of work and is variable depending the SCM commercial contact responsible for creating the commitment. Is this something that Cenovus could try to standardize? Response: Possibly. Please work with your SCM commercial contact to talk about how standardizing our commitment structure will improve your turn around times on LEMs ticket submissions and overall processing time.

24 FAQ s Procurem ent/ Receiving 15. Question: There was a big concern with the number of RFIs and Change Orders and their impact on the original appearance and structure of the SCM Commitment. For example, a commitment with 10 line items with 10 RFIs / Change Orders for each line item will result in 100 additional lines on the order to reference for LEMs and Invoice submissions. Response: You are correct, it would result in 100 additional detail lines However, we are examining ways in which this could be streamlined in the future. Please ensure you are subm itting as accurate of a response as possible to SCM s proposals to potentially decrease the num ber of RFI s required. 16. Question: Will line item 1 always be labour and line item 2 equipment? Response: This is variable depending on how it is created by the commercial contact.

25 For m ore inform ation and updates This presentation will be posted on Contractor Connection Contracts: Invoicing: For additional inform ation Supplier webpage: http: / / / contractor einvoicing Contact: ei nvoicingsupport@cenovus.com Com m ercial Contact: As listed on your com m itm ent or contract

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