Project Management in the Oil and Gas Industry

6.9.3 Negotiated 
Tender
Negotiated tender is when the commission representative meets with the 
contractor(s) to reduce prices by bidding among them rather than dealing 
through direct negotiations.
We usually use this type of tendering in the following cases:
• Consultancy work, which requires technicians, specialists, 
or experts
• Things that only exist for one contractor
• Things monopolists manufacture or import
• Things that cannot be identified exactly
• Procurement, general contracting, and transportation ser-
vices and the delivery of services, which are characterized 
by urgency
• Two competitive contractors provide the same price and, for 
urgency, we cannot redo the tender
Committees consist of technical members, financial members, and 
other legal bodies, such as the committee that is responsible for negotiat-
ing by reducing prices. This negotiation takes place in meetings between 
contractors and the bidding is done to reduce the price.
The contractors are invited to submit bids by sending the letters of 
acknowledgment of receipt containing the data to be mentioned in the 
announcement of public tenders and set out with these regulations to 
schedule the first meeting of the committee.
The invitation should be submitted to the largest possible number of 
operators in the type of activity, registered suppliers, and contractors.
The negotiation may also be advertised and the committee of nego-
tiations will do the negotiation with all suppliers and contractors. Their 
discussion in public meetings is open to suppliers, contractors, or their 
representatives. The committee will then submit its recommendations to 
senior management, depending on what the competent committee was not 
authorized for by direct contracting.
6.9.4 Direct 
Order
This type of tender is usually performed in case of two situations: very 
urgent issues that can not wait for the normal bidding procedure or in 
the case that a product or service can be only be provided by one com-
pany. This is common in industrial projects or in the case that we need to 

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Project Management in the Oil and Gas Industry
develop a special engineering study and there is only one company that can 
do this engineering service.
In this case, the agreement will be direct to the vendor and negotiation 
about the price in this type of tender is rare.