PUBIC SECTOR OPEN TENDERS : How to win 'em

First of all, I want to tell my readers that the sales methods I have outlined here will work in the  Indian sub-continent without a hitch. But the US or Europe..I'm not sure ..You will need to compensate for culture differences. If you can do that , the work's yours. Why I say this is because I saw a visitor to this blog from google, him or her getting the link by searching google for" How to sell to Public Sector in the US". So, I''m really sorry but you won't have success 100% through this blog. You'll know important things which will help you in your career. If you are really interested, send me a mail and I'll revert as soon as I get the time

Some rules in a Public Sector Press Tender, worth mentioning i.e. The Weak Links where the defense can be breached, have been roughly given below as A few weak links in the tendering process. Before we do that, let me share some specific properties of press tenders with you.

A Press Tender usually is a two-part type. Part I (the Techno-commercial Bid ) and Part II (the price part), being the two parts. This is done to save time.

For system tenders, one technical bid can run to 100 or more pages. Generally, there are some pre-qualification norms, which you have to satisfy. The proof of these should be enclosed in the Techno-Commercial Bid. Say, for a job of fabrication and laying of a cross country pipeline where the estimated cost is $500 million, you need to have executed at least two similar projects of $200 million or more, in the past two years. You need to have certain equipment and machinery-if you do not own them, at least you should have access to. You need to have financial solvency so that client is assured of your capability to meet the operating/running expenses.

Let us consider a hypothetical party of five parties tendering for a job. The pre-qualification criteria which also includes the EMD criteria are checked first and if you do not satisfy them, out you go. Next comes the say of the technical indenter who will read over the remaining tenders. Let us assume, he finds two are okay and another, dicey. He scraps it.

Next come the contract commercial and special conditions. Everything is examined. Have you accepted the customer’s payment terms. What is your validity? What is your price basis? Have you considered taxes etc. If yes, at what rates? Etc., etc. Now this is not boring at all. In fact, it is very interesting and if you are feeling bored, the composition-al talents of the undersigned or their lack, is to blame and not the facts themselves.

Finally the two parties who qualified are called and told that the price-bids will be opened on such and such date and time. (The Price bids of the others are returned unopened). The price bids are opened and generally, the lowest gets the order. That is the gamut of the Public Sector Press Tender. Finally, what about time? The period from the date of the press ad to the date of order placement will take not be less than six to eight months. Tough if you are in a hurry but sorry pal, you have to wait.

 

Now that I have told you briefly, the entire tendering process, I will elaborate on those weak links and perfectly legal ways to gain an advantage over the other parties, by using these weak points of access, in my next post.

                                             So for now, its

                                             Adios  Amigos!

                                             Hasta la Vista,

                                             Bilbo

Selling to the Public Sector: LIMITED AND OPEN TENDERS

Before I proceed, I want to say that I do not advocate winning tenders by paying bribes. In in my career, I have indeed gifted bottles of scotch and a book on one occasion (a copy of Pirsig's “Zen and …. Maintenance”), but not as a bribe. Any person can win an order by paying a bribe. The challenge lies in getting the order and keeping the process within ethical boundaries. This blog does not condone or advocate bribery or canvassing in any form.With that out of the way, let us now come back to our subject. If you want to do business with the Public Sector, the  first thing you should know that is the chain from the requirement identification stage to the tender stage and then the Purchase Order stage.

P

ublic Sector Tenders are of two types-Open or Limited. What are these? Open is the tender as we know it. Limited tenders are actually quotation requests. They are  sent to specific OEM’s/Traders who are registered with the Materials Department and are asked to quote for items within a particular date. There is no earnest money involved, as the Materials Department knows you are in earnest. A limited tender may be sent to your competitor and not to you.   There are two main differences between Limited and Open Tenders.

1.   1.      You are not allowed to be present when the offers are opened, and ...

2.  The tenders may not be opened at a particular date specified, but postponed by a day, 2-3 days even a week (depending upon the convenience of the officers who are required to be present).

 Once everything is alright, the offers are opened and the prices, commercial terms are listed, and the file is sent to the indentor. The indentor goes through the offers, rejects offers which he does not have technical confidence in and returns it back to Materials, who then sends it to Finance for clearance. Finance checks out the proposal and vetts it and sends it back to Materials. The Materials head then signs the file and deputes his assistant to release the PO, who gets it made, checks and signs it, gets it countersigned and releases the PO.

Why are some tenders limited and some public? It depends on the value (landed) of the offer.  Limited tenders can be floated only when the total cost estimate does not exceed a fixed sum which may differ from organization to organization.



Although the process looks complex, it is actually simple. Read it again and you will get the drift of sense coming out of that allegedly complex mumbo-jumbo.

Till next time then? 

Ja?

Auf Widersehen

Bilbo

Prologue: (Indian Public Sector business)

Some commonly used abbreviations

NIT: Notice inviting Tender

EMD: Earnest Money Deposit

ICB: International Competitive Bid    NCB: National Competitive Bidding

RFQ: Request for Quotation  

RFP: Request for Proposal

P&F: Packing and Forwarding

DGSD: Directorate General of Supplies & Disposals (Under the ministry of Commerce and Industry)

ST: Sales Tax   CST: Central Sales Tax

IC : Interchangeability Certificate

These are some abbreviations, which you will come across when you do business with the Indian Public Sector. It is an irony that the very rules, which were, enforced for transparency in Public Sector dealings have now become the bane of the Public Sector, for you can take advantage of them if you wish to.

It should not be assumed that the Indian Public Sector is totally corrupt. It is nothing like that. Corruption is a way of life in the states but not in the centrally administered Public Sector Units. If fingers can be pointed to the Public Sector then it is only in the respect that they are bound and tied by the lowest rule, even if they are well aware that the lowest party got through the technical scrutiny only based on assumptions.

What is true is that the Public Sector Officers remain confined to their departments. If  the maintenance department and the planning department have got some overlaps, no one co-operates officially because “it’s not my job”. This attitude and the so called transparency attitude are now the major woes of the Indian Public Sector. As a reputed Materials Manager once told me “As per the existing rules, we can remove our clothes. But if you think that we are going to show you our briefs, you got another think coming”. Bully for him.

In this section, I’ll guide you through the quagmire of doing business with the Indian Public Sector, but never in a negative way. The State Government departments.... They are beyond salvation now. What do you say about the Chief Engineer of a WB State department who on asked to state the reason for the discrepancy of  official treated water figures and actual treated water says that he will be risking his pension if he makes public the figures for the public works that his department has done. All this in a linked in discussion forum, too. And this gentleman is now looking for a consulting position (after his impending retirement) abroad in the US(probably where his sons or daughters are settled) so that he can pass on his expertise in showing 1 equals to 2, to his US bosses.

Here I conclude this prologue, friends with the hope that you will like it.

It is not my intention to thrill or educate but only to tell you what you will be able to find yourself but at the cost of time. The novel, the plot of which, is outlined here. starts from my next post.

Till then,

It's 

Merci et Adieu

Bilbo