Eskom is a government-owned public utility company that is responsible for providing about 95% of the total electricity supply to South Africans at large. Established in 1923, it is among the top seven utilities in the world in terms of generation capacity and among the top nine in terms of sales. The organisation has a number of important and extensive services to provide to the African continent which requires a large amount of skill.
As an operator of numerous power stations throughout the country, including Africa’s only nuclear power plant at Koeberg in the Cape, Eskom often requires assistance in the form of supply and delivery of electrical components, coal plant maintenance, etc.
Sourcing this assistance is done through a tender process. Essentially, a tender is an offer to do work or to supply goods at a fixed price. The process is designed to ensure that the work to be done is given out in a fair way. Driven by a number of procurement policies, tenders become binding business contracts once accepted by both parties.
Eskom awards tenders due to the need to outsource skills or services provided by some private companies. The tenders may be small-scale or relatively huge projects. An example is the latter, is the tender offered to French firm Areva. Dubbed by the media as “the never-ending tender,” because it took four years to finalize, this tender is for the refurbishment of the Koeberg nuclear plant.
Key Points to consider before placing a bid for a tender:
- Tenders are for specific needs, so it’s important to ensure that you can match the technical, skill and experience requirements.
- Consider the costs associated with preparing for your bid.
- Estimate the costs of fulfilling the contract.
Different Types of Tenders:
Engineering and Construction Tenders (standard and short contracts) are generally suited to companies with the capacity to undertake these projects. These may include maintenance, installation, refurbishment, design, buildings, etc.
General conditions purchases and supply Tenders are reserved for the procurement of material from a qualified supplier. These products and services may include machinery, construction materials, clothing and food.
General Services Contracts are issued in order to obtain various services form qualified service providers. Examples include cleaning and gardening services, equipment maintenance and on-site medical services.
NEC3 Contracts come in both standard and short form. Similar to general service contracts, they are designed to ensure provision of services over longer periods of time. This ensures end-to-end project management and facilitation.
Professional Services Contracts are for when particularly specialised services are required.
Power Purchasing Agreements involve the purchasing of raw materials, (e.g. coal) that are necessary for the generation of electricity at any Eskom plant.
What the actual Tender process involves:
Eskom regularly posts a list of tenders online. Anyone interested in bidding can conduct a general search to identify contracts. Important to consider, are the requirements for the contract, as well as the fixed price offered (where applicable.)
The next step would be to fill out and submit all the relevant forms, which can be collected and submitted as specified in the tender notice.
- A description of your company.
- Products and services that your company specialises in.
- Your company compliance to relevant regulative authorities.
- Previous projects completed.
- Other supporting documents required by Eskom.
- These forms are then to be submitted usually in an envelope, with the tender number written on it, by the closing deadline.
- There may be meetings that must be attended.
- Following a preliminary check to qualify or disqualify potential candidates, a thorough review is conducted.
- Relevant factors such as the offered price and compliance of the product or service are considered further.