W3.1_Muslem_Assesing Tendering Options for Extranet Service Using Decision Matrix Analysis
Problem Statement:
Extranet is an important element
in OPWP procurement for the purpose of sharing tender documents and information
with suppliers. Currently, OPWP does not utilize extranet, but relies on
contracted advisors to provide this service. In some cases, advisors charge a
cost for it as shown in the table below.
Project
|
Year
|
Cost of Extranet
Service (OMR)*
|
Project
A
|
2012
|
4,000.00
|
Project
B
|
2013
|
0.00
|
Project
C
|
2013
|
0.00
|
Project
D
|
2015
|
0.00
|
Project
E
|
2016
|
0.00
|
Project
F
|
2017
|
20,000.00
|
Project
G
|
2017
|
0.00
|
Project
H
|
2017
|
0.00
|
* Figures are indicative.
Studying historical data and
current situation show that extranet service has been provided free of charge
for most of our projects. However, the high cost of extranet service for
Project F commands a need to study feasible options to procure the service for
OPWP future projects.
Feasible Tendering Options:
Normally, there are three modes of
tendering; Single Tender, Limited Tenders, and Open Tenders [1]. The three
options will be assessed in this report using Decision Matrix Analysis.
Outcomes of Each Option:
Single tender provides a rapid
lead time as it considers a single source with no competition. On the other
hand, open tender allows greater competition, hence better chance to have
competitive bids. According to PPP Certification, Open tender is the most
common tendering process [2]. Limited tender might produce similar outputs to
open tender for this service as potential tenderers are most likely to be local,
and hence similar service cost. The added advantage of limited tender is the
slightly shorter tendering period.
Selection of Criteria:
In its procurement, OPWP always
adheres to its obligations that are set by the Authority for Electricity
Regulations (AER). This is a key criterion for this assessment. OPWP also seeks
to increase competition in order to receive competitive bids due to the economic
purchase obligation that OPWP has to adhere to. Another criterion is the
procurement timeline due to the need to procure the service within three month
timeframe which is the period from advisors appointment to the release of
Request for Qualification (RfQ) of a project.
Analysis and Comparison of Options:
The following table compares each
option against the selected criteria.
Criteria
|
Meets OPWP Obligations
|
Better Competition
|
Faster Delivery time
|
Total
|
Weights
|
3
|
2
|
1
|
|
Single Tender
|
0
|
0
|
3
|
3
|
Limited Tender
|
3
|
4
|
2
|
9
|
Open Tender
|
9
|
6
|
1
|
16
|
OPWP’s obligations do not allow to
adopt Single Tender Mode. This option can be easily disqualified.
World Bank guidelines indicate
that limited tender may be suitable where there is a limited number of
suppliers, or other reasons that might justify moving away from open tender [3].
Limited tender is less competitive than open tender due to the smaller pool of
competition to provide the service [4].
In term of tendering timeline,
excluding single tender, limited tender offers a shorter tendering process by
approximately 10 days which are the usual period of tender purchase for open
tender mode. However, the set three month timeframe is sufficient for both
types to be conducted, even when considering the 40 day tendering period as set
by Tender Law.
Recommendation and Selection of Preferred
Option:
Open tender is the best option for
this procurement as shown in the analysis above. It is recommended that the
procurement for extranet service shall not be triggered unless advisory bids of
future projects indicate a need. This is because extranet service in most OPWP
projects is procured by advisors at zero cost as highlighted earlier. However,
RfP Documents for the service shall be prepared in advance. Although open
tendering is favorable, it could face the risk that the tender advertisement
might not reach to all potential tenderers. To deal with this risk and have
better competition, it is recommended to conduct a market screening prior
release of tender, and notify potential tenderers of the advertisement.
Performance Monitoring:
Extranet portal requires annual
maintenance post implementation. This shall be handled by IT Department, along
with log-in authorization requirements. The management of extranet portal,
including documents update, will be handled by project managers in PD
Department.
References:
[1] Central Vigilance Commission (ND), Tendering stage, PDF.
Retrieved from; http://cvc.nic.in/3%20Tender%20Stage.pdf
[19 November 2017].
[2] PPP Certification (ND), Main Types of PPP Tender
Processes. Retrieved from; https://ppp-certification.com/ppp-certification-guide/2-main-types-ppp-tender-processes
[20 November 2017].
[3] World Bank (2011), Guidelines Procurement of Goods,
Works & Non-Consulting Services; Under
IBRD Loans & IDA Credits & Grants by World Bank Borrowers. PDF.
Retrived from; http://documents.worldbank.org/curated/en/634571468152711050/pdf/586680BR0procu0IC0dislosed010170110.pdf
[20 November 2017].
[4] Australian National Audit Office (2015), Limited Tender
Procurement. Retrieved from; https://www.anao.gov.au/work/performance-audit/limited-tender-procurement
[20 November 2017].
Excellent case study, Muslem..... Now that you have picked open tender, of the 13 types of CONTRACTS which one would be most appropriate for you to use? (Don't forget to include the various incentive types in your analysis)
ReplyDeleteBR,
Dr. PDG, Jakarta