SPDC joint venture conducts first online bidding in Nigeria

Jan 13, 2004 01:00 AM

The Shell Petroleum Development Company (SPDC) of Nigeria operated Joint Venture, has conducted the first online bidding process in Nigeria, as part of efforts to boost electronic commerce in the country. The online bidding process which raked in $ 6 mm (about N 840 mm) savings was for the procurement of an 88 km of 40 inch pipeline for the Eastern Gas Gathering System-1 (EGGS-1).
Shell disclosed that the EGGS-1 facility is part of the gas supply infrastructure required for the effective take-off of the Nigeria LNG (NLNG) trains 4 and 5. The company also pointed out that the bidding process which took place at the headquarters of the Nigerian National Petroleum Corporation (NNPC) was to enable senior officials of the corporation and the SPDC test the online bidding system.

It was explained that online bidding is a method of collecting prices of goods or services as part of a tender exercise, adding that the conduct follows extensive consultation with the NNPC. The process is such that after the completion of the other steps in the standard process, that is, pre-qualification and technical evaluation, instead of submitting bids in sealed envelops, those who tender are given access to a website and their commercial bid is placed on the internet.
The company explained that the online bidding process affords those who submit bids immediate feed back on the competitiveness of their bids, an opportunity to submit more than one bid, speedy and lower transaction cost.

Similarly, the purchasing company benefits from the increased element of competition which the reverse auction provides.
"All parties benefit from the very tight business controls which makes the bidding process demonstrably fair and transparent," the company explained.
It was further disclosed that a multidisciplinary team was set up in the SPDC to prepare and execute the event and that the team had to contend with two major challenges including the provision of internet access in the Abuja offices and a tight timetable driven by the needs of the project schedule.

On the first challenge, IT staff of the company and the local internet service provider for SPDC's existing internet cafes, provided six PCs and a UPS system in the NNPC boardroom, and connected these through a router and microwave/VSAT link to the internet.
It was gathered that this set-up proved to be reliable as it withstood a heavy thunderstorm and electrical power cut which hit the NNPC towers. However, the back up facility immediately came on stream and the bidding process continued without interruption.

To address the second challenge, the company said it had to work round the clock through early engagement of staff of the National Petroleum Investment Management Services (NAPIMS), to explain what online bidding, internet technology, bidding formats and business/security controls.
The event which took place at the NNPC Towers was witnessed by a team from the corporation led by the group executive director in-charge of exploration and production, Emmanuel Ayoola, while the SPDC team was led by the company's director in-charge of production, Basil Omiyi.

Both teams witnessed the online bidding process on a large screen, with four vendors taking part, while participants were all agreed that the process merits a focused follow-up.
The company recalled that it has been using the online bidding process for the past two years for lower value goods and services, aided by the establishment of internet cafes in its Warri and Port Harcourt offices to encourage participation from Nigerian vendors.

Source: Vanguard
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