KBR Sales Guidelines

Market Data & Business Results

Sales Process Phases

Client Interest / Need

Client Invitation to Prequalify
Client Invitation to Tender / Bid
Client Invitation to Negotiate
Client Awards Contract
Client Satisfaction
& Future Work
Market
Analysis
&
Strategic
Planning

Position

Pursuit
Approval

Proposal

Negotiation

Contract
Award
&

Documentation

Post
Award

Negotiated Work
Submit Proposal
Submit Qualification

Book Award
Best & Final Offer

Recommend Pursuit
Define Desired Opportunity Profile

BP-GL-KBR-SALES-001
June 2003 (Rev. 1)

Sales Guidelines - BP-GL-KBR-SALES-001

Contents

STATEMENT OF AUTHORITY .................................................................................... 1

REVISION SUMMARY ................................................................................................. 2
PREFACE ................................................................................................................... 5
PART 1 - OVERVIEW................................................................................................... 1
PART 2 - ROLES AND RESPONSIBILITIES ............................................................. 11
Senior VP Sales & Marketing .......................................................................................... 12
Regional Sales VP .......................................................................................................... 14
VP Program Management............................................................................................ 14
VP Differentiated EPC.................................................................................................. 14
Product Line Sales VP .................................................................................................... 15
Sales Leader .................................................................................................................. 15
VP Sales Management & Strategic Accounts ................................................................. 17
Sales Coordinator............................................................................................................ 17
Director - Marketing......................................................................................................... 18
VP Proposals .................................................................................................................. 18
Manager, Proposals ........................................................................................................ 18
Proposal Manager ........................................................................................................... 18
Proposal Specialist.......................................................................................................... 19
VP - Washington ............................................................................................................. 19
Director Accounting & Finance..................................................................................... 19
VP Technology Sales ...................................................................................................... 20

PART 3 - SALES CRITICAL SUCCESS FACTORS .................................................. 21

PART 4 - SALES PROCESS...................................................................................... 22
1. Client Input, Market Analysis & Strategic Planning ............................................... 24
1.1
Sales Input to Strategic Planning ............................................................. 25
1.2
Market, Client, Competitor and KBR Analysis.......................................... 25
2. Positioning to Differentiate..................................................................................... 26
2.1
Introduction............................................................................................... 26
2.2
Work Processes ....................................................................................... 27
2.2.1 Early Identification and Screening of Prospects ............................. 27
2.2.2 Sales Assignments ......................................................................... 28
2.2.3 Strategic Accounts.......................................................................... 29
2.2.4 Management of Strategic Accounts................................................ 29
2.2.5 Key Strategic Account Activities ..................................................... 29
2.2.6 Involvement in Early Project Phases .............................................. 30
2.3
Specific Requirements.............................................................................. 31
2.3.1 Program Management and Differentiated EPC Projects................ 31
2.3.2 Project Finance and Development Prospects ................................ 31
2.3.3 EXIM / ECA Financing .................................................................... 32
2.3.4 Capitalization of Pre-contract/Proposals Costs .............................. 32

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Contents

3.

4.

5.

6.
7.

8.

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Pursuit Process ..................................................................................................... 33

3.1
Work Processes ....................................................................................... 33
3.1.1 Assessing Whether to Pursue or Decline an Opportunity .............. 33
3.1.2 Recommendation to Pursue or Decline Opportunity ...................... 33
3.1.3 Sales Strategy ................................................................................ 33
3.1.4 Establishing a Differentiated Capability .......................................... 34
3.1.5 Prospect Ratings ............................................................................ 38
3.1.6 Authorization to Pursue or Decline an Opportunity ........................ 42
3.1.7 Approval Authorization Levels ........................................................ 42
3.1.8 KBR Inquiry Review Committee (IRC)............................................ 42
3.2
Specific Requirements ............................................................................. 43
3.2.1 Halliburton Executive Approval....................................................... 43
3.2.2 Joint Ventures/Business Relationships .......................................... 43
3.2.3 Agents/Sponsors ............................................................................ 43
3.2.4 Parent Company Guarantees......................................................... 44
3.2.5 Master Service Agreements and Similar Long Term Agreements . 45
3.2.6 Export Compliance ......................................................................... 46
3.2.7 Sales Information System (SIS) Input & Maintenance ................ 47
3.2.8 Bonding/Bank Guarantees ............................................................. 47
Proposal Preparation............................................................................................. 49
4.1
Work Processes ....................................................................................... 49
4.1.1 Proposal Strategy, Plan & Execution.............................................. 49
4.1.2 Mid-Point Reviews .......................................................................... 49
4.1.3 Cost Estimate & Operations Review .............................................. 52
4.1.4 Management Review, Pricing & Final Proposal ............................. 52
4.1.5 Pricing Review Committee (PRC) .................................................. 52
4.2
Specific Requirements ............................................................................. 57
4.2.1 Small Proposals Letter Proposals ............................................... 56
4.2.2 Proposal Cost Reimbursement and Award Fees ........................... 56
Contract Negotiation.............................................................................................. 57
5.1
Work Processes ....................................................................................... 57
5.1.1 Client Clarifications to the Bid......................................................... 57
5.1.2 Clarification Meetings ..................................................................... 57
5.1.3 Resolving Contract Issues.............................................................. 58
5.1.4 Final Contract Agreement............................................................... 58
5.2
Specific Requirements ............................................................................. 58
5.2.1 As-Bid Quotation Analysis .............................................................. 58
Client Feedback..................................................................................................... 59
Contract Booking & Documentation ...................................................................... 59
7.1
Work Processes ....................................................................................... 61
7.1.1 Authorization to Commence Work.................................................. 61
7.2
Specific Requirements ............................................................................. 61
7.2.1 As-Sold Quotation Analysis (QA) ................................................... 61
Post Award ............................................................................................................ 62
8.1
Documentation ......................................................................................... 62
8.2
Continued Relationships .......................................................................... 62

Sales Guidelines - BP-GL-KBR-SALES-001

Contents

PART 5 - GLOSSARY ................................................................................................. 64

PART 6 - POLICIES AND PROCEDURES ................................................................. 68
2101 - Approval to Pursue Client Inquiries
2102 - Inquiry Review Committee (IRC)
2103 - Pricing Review Committee (PRC)
2104 - Review & Approval of Joint Venture/Business Relationships Agreements
2105 - Review & Approval of Agent Agreements
2106 - KBR Sales Information System
2107 - Letter Proposals U.S. Version
2107 - Letter Proposals U.K. Version
2108 - Contract Negotiations, Closing & Documentation
2109 - KBR Booking Committee and Reporting Guidelines
2111 - Surety Bonds, Bank Guarantees & Letters of Credit
2205 - Export Licensing Policy
2210 - Parent Company Guarantees
User Guide #001: Sales Information System (SIS)
User Guide #002: Purpose, Use and Development of the Quotation Analysis
Gifts, Enterainment, and Travel-Related Expeditures

PART 7 - FORMS/DOCUMENTATION ....................................................................... 70

Form B-1: Joint Venture/Business Relationship Approval Request
Form B-2: Agent Approval Request
Form B-3: Parent Company Guarantee Approval Request
Form I-1: IRC Small Proposal Application Form
Form I-3: IRC/PRC Application Form
Form I-4: IRC Decline Form
Form I-5: Budget Adjustment Memorandum (BAM)
Form I-6: Disposition Report (New)
Form P-3: Quotation Analysis - Lump Sum
Form P-4: Quotation Analysis - Reimbursable Rates
Form P-5: Quotation Analysis - Reimbursable Multiplier
Form P-6: Quotation Analysis Estimate Review (New)
Form C-10: KBR Executive PRC Review
Form D-1: As-Sold Quotation Analysis Distribution Cover Sheet
Form D-2: As-Bid Quotation Analysis Distribution Cover Sheet
Form D-3: Contract/Agreement, Letter of Intent or Purchase Order Distribution
Cover Sheet
Form D-4: Disposition Report Distribution Cover Sheet (New)
Form T-1: KBR Bond/Guarantee Application Form

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KBR Sales Guidelines - BP-GL-KBR-SALES-001

STATEMENT OF AUTHORITY
These Sales Guidelines describe practices and procedures to be applied to the KBR Sales Process.
These Guidelines are issued under my authority and with my approval.

Rob Berra
Vice President, Sales Management and Strategic Accounts
June 2003

Authority.doc
June 2003

Sales Guidelines - BP-GL-KBR-SALES-001

Revision Summary

Below are the significant revisions made to Revision 1 of the Sales Guidelines. Minor changes have
not been indicated below. Revisions to Part 6, Policies and Procedures, are listed separately in
each individual procedure.
Part 1

Reorganized into three primary sales regions and added Sales for Differentiated EPC and
Program Management.

Part 2

Added focus on Highly Differentiated EPC, Services, Program Management, and Centers of
Excellence

Reorganized into three primary sales regions and added Sales for Differentiated EPC and
Program Management

Added greater detail to Sales Leader Roles and Responsibilities, including addition of sellerdoer to Sales Leader role

Deleted description of VP-Development

Updated various positions to reflect current organization

Clarified roles of Regional Sales VP and Product Line Sales VP

Part 3

No significant revisions have been made

Part 4

Reorganized entire section, added numbering sequence and associated outline for easy
reference.

Added Sales Leaders responsibility to provide input from Clients perspective into strategic
planning process

Added detail to Sales Assignments responsibility

Added descriptions on:

Program Management and Differentiated EPC Projects

Project Finance and Development Prospects

EXIM/ECA Financing

Revision Summary.doc / June 2003

Sales Guidelines - BP-GL-KBR-SALES-001

Revision Summary

Capitalization of Pre-Contract/Proposal Costs

Parent Company Guarantees

Master Service Agreements and Similar Long Term Agreements

Bonding/Bank Guarantees

Revised Inquiry and Pricing Authorization Levels

Added explanation of the %Go and %Get ratings and their significance to management. Added
rules of thumb for ROSI

Modified and expanded %Go and %Get milestone tables, which are now separated by different
contract types and Product Lines

Transferred responsibility of export compliance from the Product Line VP to the Regional VP

Renamed the computer system for tracking prospective work from FAMIS to SIS (Sales
Information System)

Added note to emphasize that the Quotation Analysis contains sensitive and confidential
information and that appropriate distribution of such documents must be considered

Added section on Client Feedback, which requires Sales Leaders to request feedback from the
client and to complete a Disposition Report

Added a few paragraphs that address the importance of maintaining a relationship with the
client and that we need to strive to earn our customers loyalty

Part 5
Updated to include additional terms.
Part 6
The following new Procedures have been added:

Procedure #2107 - Letter Proposals U.K. Version

Procedure #2111 - Surety Bonds, Bank Guarantees & Letters of Credit

User Guide #002 - Purpose, Use and Development of the Quotation Analysis

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Sales Guidelines - BP-GL-KBR-SALES-001

Revision Summary

Notes to Administrator:
1.

All future revisions to the Sales Guidelines are to include a summary of changes, to be added
to the end of this revision summary document.

2.

The Sales Guidelines are designated as document BP-GL-KBR-SALES-001. When revisions

are made to any part of the Sales Guidelines, the document, as a whole, is to be revised.

Revision Summary.doc / June 2003

Sales Guidelines - BP-GL-KBR-SALES-001

Preface

This Sales Guideline document was prepared to define a uniform KBR sales philosophy and set of
operating procedures. It is applicable to all KBR personnel interacting in the sales process, including
Seller-Doer personnel operating in the selling phase. In this document, the term Sales Leader
applies to the KBR person who has the principal responsibility for closing the sale.
The latest version of the KBR Sales Guidelines can be found on the KBRConnect intranet web site.
Included in the Sales Guidelines are:
An outline of the KBR sales process
An explanation of the relevant policies and procedures, and
Blank versions of frequently used forms/templates that document the sales process.
This document is intended to be brief. It is NOT intended to describe EVERY Company work process.
Other functions, e.g. proposals, project management, technology, engineering, accounting and finance,
etc., will have their own procedures and desk manuals which should be modified as necessary to reflect
the requirements of the new sales guidelines. The Sales Guidelines have been updated to reflect the
current operating environment of KBR. Significant changes from the original August 2001 issue are
listed on the attached Revision Summary.
To increase overall investor confidence in U.S. capital markets, the United States Congress passed the
Sarbanes-Oxley Act of 2002. The act includes far-reaching responsibilities for public companies,
investment analysts and others involved in providing information to the public. Particularly notable
requirements include corporate responsibility and accountability for financial reports, enhanced and
faster financial and other disclosures, auditor independence and an absence of investment analyst
conflicts of interest.
As a public company, Halliburton is subject to the Sarbanes-Oxley legislation, rules and guidance.
Complying with the Sales Guidelines provides an essential mechanism to ensure compliance with the
new legislation and corporate responsibilities.

Preface.doc / June 2003