vender meet 1406

7/30/2019 Vender Meet 1406

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7/30/2019 Vender Meet 1406


ONGC

ANDBUSINESS PARTNERS

7/30/2019 Vender Meet 1406


The Change Process

• Sweeping changes initiated inContracting Policy and Proceduressince August 2001 to

Speed up the Process.Improve transparency & equity.Change from confrontation tocollaboration.

• First Vendor Meet held on 5 th April 2002.

7/30/2019 Vender Meet 1406


The Change Process

Specifications & BECsTendering PolicyTendering Process

Contract ManagementInternal ProcessesLegal Terms & ConditionsDispute Resolution

Others

7/30/2019 Vender Meet 1406


Specifications and BEC•

Removal of ambiguity in framingspecifications• Specifications should be focused on

Compliance with National andInternational codes.Exact operational requirements.

Sourcing Best-in-Class Technology incritical areas.• Indentor/ user has exclusive authority on

specifications.

7/30/2019 Vender Meet 1406


Specifications and BEC•

In Turnkey Contracts, specifications to bebased on CRINE.• Vendor inputs welcomed in framing the

specifications & BECs.• BEC followed in the last contract to be

adopted unless specific changes are

justified. Such changes to be approvedby immediate superior to CPA.

7/30/2019 Vender Meet 1406


Specifications and BECBEC Standardization

BEC for purchase of goods standardized andissued in April, 2003.Standardized BEC for Service Contracts to beissued in June, 2003.Standardized BEC for Turnkey Contracts to beissued in August, 2003.

•

Standardized BEC to be uniformly incorporatedin all tenders by all Work centers.

• Changes in standardized BEC can not be

approved by any authority other than EPC.

7/30/2019 Vender Meet 1406


Specifications and BEC

• Vendors suggestions on BEC may beconsidered in Pre-bid conference.

•

No change in BEC allowed after bidopening.

7/30/2019 Vender Meet 1406


Tender Policy

• Reduction in number of Tenders at Asset/Basin/ Service/ Corporate level by

clubbing all requirements.

• Thrust on long term contracts.

7/30/2019 Vender Meet 1406


Tender Policy • For procurement of certain high value items of

regular consumption like Casing Pipes, LinePipes, Production Tubing etc., procurement hasbeen centralized and ONGC has entered into

Long Term Contracts leading to reduction innumber of tenders. Also, long term contractsbeing entered for C/H of drilling rigs/ Vessels.

•

For procurement of spares, ONGC intending toenter into long-term Rate Contracts with OEMs.

• Post contract commitment for supply of spares

during the life cycle of equipment .

7/30/2019 Vender Meet 1406


Tender Policy•

ONGC to have a policy for entering intoAMCs with OEMs.• Under CRINE concept, if improvements in

design etc. are effected by thecontractors after award of contract, 20%of incremental benefit could be offeredto the contractor.

• Bonus linked to IRR to be paid in case ofProject completion ahead of schedule(Min. one month)

7/30/2019 Vender Meet 1406


Tender Policy• Provision for facilities to ONGC

executives deleted from TurnkeyContracts.

• Commitment on Training made anenabling clause. Cost of Trainingexcluded from evaluation.

• For critical equipment, Inhouse expertcommittee(MDT) to evaluate technicalbids.

• Revised guidelines sought from CVC forspecific type of tenders like Rig hiring etc

7/30/2019 Vender Meet 1406


Tender Policy

• No opportunity for clarifications will begiven after opening of bids.

• Clarifications required by bidders , if any,should be only through Pre bid

conference.

7/30/2019 Vender Meet 1406


Tender Policy

• Concept of Pre-bid Conferenceintroduced to resolve doubts of bidderson the various BEC and tender clauses as

well as on tender specifications.• Pre-bid conference being chaired by

senior Executives from ONGC side.

7/30/2019 Vender Meet 1406


Tender Policy• New domestic bidders to be considered

for placement of development ordersupto 20% of the tendered quantity.

•

Vintage criteria of vessels deleted.Prospective bidders to offer vesselsmeeting ONGC specifications along withthe Statutory certificates conforming theclass requirement at all times, IMO codesand having a minimum residual life tocover Primary period plus extension also.

7/30/2019 Vender Meet 1406


Tender Processing• From September 2002 all the NITs are

being published on ONGCs TenderWebsite “ongctenders .net” .

• Action on hand to improve the Websiteso that the complete tender document

can be accessed by the prospectivebidders.

7/30/2019 Vender Meet 1406


Tender Processing

• Standard time frame of 30 days(Non-EPCCases) and 45 days(EPC Cases) laiddown for award of contract from the date

of bid submission.• Technical Bid evaluation on “GO” or “NO

GO” basis. One time clarificationstopped. Bids with any deviation to berejected.

7/30/2019 Vender Meet 1406


Tender Processing

• LOI to be placed within 5 days (Non-EPC cases) or 15 days (EPC Cases)ofPrice Bid opening.

• Tender Documents to be issued only tothose bidders who meet the major Pre-Qualification criteria specified in NIT.

7/30/2019 Vender Meet 1406


Tender Processing

• PBG to be submitted within 15 days ofLOI failing which LOI stands lapsed.

• No delay permitted in submission oftenders.

• Tender Committee can not over-ride

specifications given by users/ indentors

7/30/2019 Vender Meet 1406


Tender Processing

• Bidders to confirm in the Matrix that nodeviation taken by them in their bid.

Bids with deviations stands to besummarily rejected.

7/30/2019 Vender Meet 1406


Tender Processing

• For ascertaining financial capability ofbidders, following Financial Criteria to beuniformly incorporated in BEC of alltenders exceeding Rs.5 Crs:

7/30/2019 Vender Meet 1406


Tender Processing

Financial Criteria for Supply of Goods

1. Turnover of Bidders: 50% of annualizedcontract value

2. Net Worth of the bidders: Positive

7/30/2019 Vender Meet 1406


7/30/2019 Vender Meet 1406


Tender Processing

• Bidders should not submit any unsolicitedclarification / modification/ propositionsafter submission of bids.

•

Bidders should not attempt to induceexternal pressures/ interventions etc.• In case any bidder wants to represent

with regard to processing of tender, theyshould represent only to CompetentPurchase Authority directly, whose nameis specified in the tender document.

7/30/2019 Vender Meet 1406


Tender Processing

• If requirement of tendered quantity cannot be met by L-1 bidder, negotiationswill be carried out with all otheracceptable bidders by advising them tosubmit their confirmations of matchingtheir rates with rates of L-1 bidder insealed envelopes.

• These covers will be opened in the orderof original ranking, till the totalrequirement is met.

7/30/2019 Vender Meet 1406


7/30/2019 Vender Meet 1406


Contract Management

• Payment to be released within 15 days(instead of 30 days earlier) in Service/Turnkey contracts from the date ofreceipt of clear/ undisputed invoice,complete in all respects.

• Amendment to LC, if required, to beissued immediately to avoid delay incontract execution.

7/30/2019 Vender Meet 1406


7/30/2019 Vender Meet 1406


Contract Management

• Delay in release of payments is beingmonitored at senior management level.

• Provisions have been introduced forrelease of payment to contractorsthrough Electronic Fund Transfer.

7/30/2019 Vender Meet 1406


Contract Management

• Performance Bank Guarantee to bereleased within 60 days of successful

execution of the contract.• ONGC to pick up the variation in the

custom duty / Excise duty in case ofchange / abolition of Deemed ExportBenefits within contractual deliveryperiod.

7/30/2019 Vender Meet 1406


Internal Processes

• Review of ONGCs standard terms andconditions vis-à-vis World Bank, ADB andEU is being taken up.

• ONGC personnel on deputation toforeign tour not to accept any kind ofservices or facilities or considerationsfrom the Contractors and theirassociates.

7/30/2019 Vender Meet 1406


Internal Processes

• All MM heads to fix one day in a month toattend to suppliers complaints forresolution of issues.

• Key Executives to review of all pendingissues with respect to old cases with a

view to resolve them expeditiously.

7/30/2019 Vender Meet 1406


Dispute Resolution

• Cases of disputes valuing above Rs.1Crs, which are for/ under Arbitration, canbe referred to Outside Expert Committee(OEC), after obtaining written consent ofthe Contractor, for speedy disputeresolution.

• OEC members are selected at C&MD s level.

7/30/2019 Vender Meet 1406


Legal Conditions

• In case of delay in supply/completionbeyond the scheduled date, LiquidatedDamages to be imposed as per the terms

of the contract. Hon ble Supreme Courthas laid down the Law that LD amountstipulated in the contract is a genuine pre-

estimate and the contractor who is indefault is liable to pay the sum stipulated.

7/30/2019 Vender Meet 1406


Legal Conditions

• Total liability of the supplier arising out ofthe sale or use of the equipment /material/ goods supplied by them , iffound defective, will now be limited to thecontract value.

7/30/2019 Vender Meet 1406


Legal Conditions•

New provisions have been incorporatedstipulating that the goods purchased would beused by ONGC for Exploration and Exploitationof Hydrocarbons in India only, as required underExport / Re-export control regulations of someparent countries. Further, if for any reasonswhatsoever, if these goods are to be taken foruse outside India, ONGC would request thesupplier to obtain consent from the concernedauthorities in their country.

7/30/2019 Vender Meet 1406


Implementation Results• Tender Processing expedited. Examples

are:Hiring of MWD equipment & Services – Tender finalized in 21 days of bidopening.Hiring of SDMM equipment & services – Tender finalized in 23 days of bidopening.Hiring of Whipstock & Window millingservices – Tender finalized in 10 days ofbid opening.

7/30/2019 Vender Meet 1406


7/30/2019 Vender Meet 1406


Implementation ResultsSuccess Stories• In a high value tender, a bid was

technically rejected by the EvaluationCommittee. On review, the ApprovingAuthority found the offer to betechnically acceptable and authorizedopening of Price Bid. This offer turned out

to be lower than the earlierrecommended offer by US $ 12 million.Award was accordingly made. Decisionsustained not withstandingrepresentations from various quarters.

7/30/2019 Vender Meet 1406


Implementation Results

•

Success Stories

– Decision for purchase of software for

Virtual Reality center implemented. – Charter hiring of Modular rig

accomplished in record time. – The last case of hiring of Jack up rig

was finalized in 100 days.

7/30/2019 Vender Meet 1406


7/30/2019 Vender Meet 1406


THANKYOU