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

WHY DALE CARNEGIE'S 'COMMON SENSE' IS TOTALLY UNCOMMON IN INDIA

REPOSTED ON POPULAR DEMAND


I have read the Carnegie classic " HOW TO WIN FRIENDS AND INFLUENCE
PEOPLE" ( and it is a classic) a "two decade" period back but the best 
illustration of my point is a story narrated in the book. ( Due to many years, the story may not be 100% accurate and my apologies).

   A Motor salesman visits a customer who is dissatisfied because the supplied motors    are  running hot. After some Q-A sessions, it comes out that the operator cannot place his hand on the motor comfortably. At this point, our salesman says bingo! but that's the point because the motors are supposed to run at 60 deg F and at this temperature, human skin  of the operator will have a natural aversion to the motor's body heat. 


So everyone is happy and our salesman comes out with applause and the confidence that the next motor order is in his pocket.


Now let's imagine the same thing in India. The salesman will be told ( first
 after some bullying by the guard) that the Purchase Manager is in a 
meeting. He goes away and next time comes with an appointment. The 
Purchase Manager meets him and expresses his disappointment with the 
salesman's motors. They run hot and are expensive!! The salesman wants 
to go to the shop but the operator is not in. Next day, he meets the 
operator who just says that his motors are hot. The salesman gives the 60
 deg F logic but the operator says no. He has other motors where he can
 place his hands and he has been running motors for 30 yrs, so...! The 
salesman slinks out of the factory with his tail between his legs and goes 
back to his office to lick his wounds. 

Does that sound familiar! so, what should the salesman do to receive 

the applause that Dale's salesman gets?? I'll explain in my next post 

but why don't you try to think about it yourself and post it here as a 

comment?

Bye for now... 

Bilbo