Tender Design and Management
Major capital projects, especially those on a larger scale than have been realized in the past, necessarily involve close coordination with likely suppliers, which complicates bidding and rules out the conventional approach of sending a full package of specifications to numerous bidders and choosing the lowest bid (or the next-to-lowest). The process involves dialogue and pre-qualification, and may even require suppliers to develop proprietary technology before price is discussed.
BSI assists operators and other stakeholders such as banks, regulatory agencies, and EPC firms, in:
- Supplier prequalification
- Technology selection, including migration path of platforms and models
- Development of tendering procedures to ensure legality, fairness, sound ethics, and the optimal price, including establishing a protocol for buyer-supplier interaction
BSI offers a thorough audit of key or strategic suppliers. Alternatively, click here for low-cost supplier profiles through our affiliate, OGPnetwork. Standard supplier profiles include: Revenue, Ownership, Headquarters, Year Established, BSI Rating, BSI Commentary, Key Competitors, Competitive Advantages, Plant Locations, and Top Customers
For strategic and long-term commitments where technology is rapidly changing, buyers need to decide which technology platform to adopt, even before the platform is known or specified. From a procurement point of view, the problem is that the cost of the up-and-coming technologies is usually unknown. BSI provides economic analyses that are designed to help make the best technology and supplier selection in these situations, through our teams of technical experts, oil and gas economists, and analysts. Recent technological assessments include, for example:
- Comparison of alternative technologies for energy storage on offshore platforms
- Comparison of alternative technologies for accessing stranded gas at economical cost
- Comparison of alternative technologies for processing heavy oil
- Survey of available technologies for small and mid-sized LNG processing facilities
- Comparison of alternative technologies for pipe coating
- Survey of newly-commercialized technologies for improving steam turbine efficiency
PREPARATION OF INVITATIONS TO BID
BSI plays an advisory role in tenders that involve a long lead time and early supplier involvement. We help with decisions that inevitably need to be made, such as for example:
- When to begin sharing information with various key and less preferred suppliers
- How to protect intellectual property rights during the long period of communication between buyer and supplier(s)
- What criteria to use in choosing suppliers and eliminating others at various stages in the process
- When to begin assembling budgetary prices (if too early, this may be counter-productive)
- How to assess the impact of potential economies of scale and potential erosion of competition by consolidating with one supplier for a long-term project
- When to begin negotiating on price
- How to best structure the institutional linkages between buyers and suppliers during the bid cycle and afterward, between supplier selection and project start date
- When to commit by signing contracts, approving budgets, and disbursing funds
BSI manages strategic sourcing programs from concept through new supplier onboarding. Often with onsite teams, we deploy a proven 16-step methodology guaranteed to generate tangible and rapid savings, and train your junior and senior staff along the way. Whether the category is engineered or standard, services or materials, capital or expense, we have you covered.
CASE STUDY IN TENDER DESIGN AND MANAGEMENT
- Industry: Chemicals
- Key Challenge: Decreasing profit margins connected to fully decentralized procurement
- Why BSI was Selected: Proven track record of achieving savings through strategic sourcing
- Project Scope: Transportation, logistics, IT, lab supplies, packaging, and other categories
- Project Approach: Spend analysis, supplier qualification, sourcing strategy, RFx, negotiation, and implementation
- Operational Benefits: Better control over corporate expenditures, and a large cadre of well-trained staff
- Financial Benefits: 14% “ready-to-sign” savings, and up to 24% potential savings with restructuring
Click here to read the full case study.
SELECTED ARTICLES ON TENDER DESIGN AND MANAGEMENT
High-Impact Sourcing: Precision-Guided Strategies for Maximum Results (State of Strategic Sourcing Study)
Single-sourcing is twice as prevalent in aerospace and defense as in other industries. Packaging buyers award 80% of their spend to 11% of their suppliers. Transportation buyers award the top supplier 23% of the business. How many suppliers should you have, and are you developing the right ones? This study quantifies the success that over 100 companies, of which half are in the Fortune 1000, have had with 12 different sourcing techniques.
50 pages, 27 charts, tables and diagrams, 10 chapters, 2 appendices, ©2005 Boston Strategies InternationalClick here for free download.
On the Cutting Edge of Strategic Sourcing (State of Strategic Sourcing Study)
Transportation and logistics companies are reducing their use of auctions by 45%. Paper companies are negotiating long-term agreements. 20% more than other companies. Consumer goods companies are purchasing in consortia 25% more than other companies. Which tools and techniques are you emphasizing, and why? This study examines how senior procurement executives at over 100 companies, of which over 20% are in the Global 1000, use 13 sourcing strategies, and which ones will they emphasize over the next four years. Over 60% of the participants hold Vice President or Director-level procurement positions.
65 pages, 39 charts/tables/diagrams, 10 chapters + self-assessment, ©2008 Boston Strategies InternationalClick here for free download.
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