NNPCL SCM_Negotiate with Preferred Bidder.pdf

NNPC Limited SCM Processes and Procedures 13.0 Negotiate with Preferred Bidder This policy provides guidance on the procedures involved in negotiating with selected vendors. Objectives The objectives of this process are to: • • • • Provide clarity with respect to negotiable and non-negotiable cont...

NNPC Limited SCM Processes and Procedures 13.0 Negotiate with Preferred Bidder This policy provides guidance on the procedures involved in negotiating with selected vendors. Objectives The objectives of this process are to: • • • • Provide clarity with respect to negotiable and non-negotiable contract terms. Agree on a fair and reasonable price. Ensure that the contract is performed on time. Exercise control over the manner in which the contract is performed. 13.1 Negotiate with Preferred Bidder Policies S/N Description 1. Tender Negotiation Negotiation shall be necessary in the event that after commercial evaluation, the committee realizes the need to achieve best value on any of the terms/components of the contract as the case may be. No negotiation shall take place with any contractor, whether in pursuance of the award of a new single source contract, or agreement on the rates/prices to apply for the variation of an existing contract, without the specific approval of the original approving authority or where none, with the written approval of the relevant authority. All negotiations shall be attended by a representative of SCM who shall be responsible for ensuring that NNPC Limited’s commercial interests are fully protected. There shall never be less than two NNPC Limited personnel present during the course of any negotiation. Additional staff may be present if the negotiation is particularly sensitive. JV Partners should also be invited to attend specific negotiations where the tender will require JV partner approval. The attendance of NNPC Limited’s personnel other than a representative of SCM shall be subject to the prior agreement of the relevant authority. 107 NNPC Limited SCM Processes and Procedures 13.1 2. Negotiate with Preferred Bidder Policies Guidelines to Tender Negotiation Meeting Management level personnel who are vested with the authority to make commitments on the contractors’ behalf shall represent the contractor. The SCM focal point should at all times ensure that the staff attending is really needed to conclude the discussions. The representative of SCM shall request that the senior tenderer’s personnel attending the meeting have full power to bind the bidder and to make all the decisions that may become necessary for the progress of the negotiation. Prior to commencement of negotiations, the tenderers organization shall send the list of their representatives with their designation. Irrespective of the numbers and categories of persons present, all minutes of negotiations shall only be signed by the most senior tenderer’s personnel present, SCM representative and the JV Partners representative as required. 3. Minutes of Negotiation Meeting Where prices, rates and costs have been agreed, the Minutes of Meeting shall contain the following paragraphs: Note: The negotiated price for the execution of the work and/or services as detailed in these minutes shall be deemed to be an offer made by the tenderer to NNPC Limited and shall only be deemed to have been accepted by NNPC Limited upon its management approval as indicated by the signing of a formal contract document, or an interim agreement, by the parties. The following words should be added to minutes of meeting for negotiation meetings held with bidder. “Take further notice that this meeting minutes shall therefore not constitute a contract or an intention to award a contract and no such liability shall arise there from.” 108 NNPC Limited SCM Processes and Procedures 13.2 S/N 1. Negotiate with Preferred Bidder Procedures Responsible Party Description Job Aid User department When the need arises for negotiation of an existing contract, Email Approach SCM to seek necessary approval for negotiation. 2. 3. 4. 5. 13.3 SCM N-4/5 Constitute tender negotiation committee. Email SCM N-4/5 Set up tender negotiation meeting with bidder. Email SCM N-4/5 Document tender negotiation minutes, Sign-off minutes by both parties and provide bidder with a copy. Word Negotiation committee Present negotiation report to Tenders Committee. Email Negotiate with Preferred Bidder Input & Output Documents Document Description Type 1. Tender negotiation Approval Input/Output As required Tenders User Committee Department/ SCM (N-4/5) 2. Minutes of tender negotiation meeting Output SCM (N4/5) S/N Frequency As required Source Recipient SCM (N-2) / Bidder 109 NNPC Limited SCM Processes and Procedures 13.4 S/N 1. Negotiate with Preferred Bidder Key Performance Indicators Performance Measure Basis of Measurement Timeframe Target Timeliness in closing commercial negotiation Latest date for setting up initial tender negotiation meeting. As required Within 2 weeks after obtaining approval from relevant Tenders Committee. 110 NNPC Limited SCM Processes and Procedures 111