Project Management in the Oil and Gas Industry

6.9.5 Tender Technical Evaluation
Two envelopes will be submitted: one envelope provides the technical offer 
and the other contains the financial offer. The committee will open the 
envelope and the technical committee will evaluate the proposals techni-
cally. After you select the technically acceptable offers, the financial enve-
lopes will be opened and evaluated and the lowest price and successful 
bidder are determined.
Evaluations of bids that are considered important and serious must be 
determined by specific criteria that assess the tender. Those standards are 
as follows:
Management system to the contractor company and its size
• The form of administrative organization at the site
• Previous experience of the contractor
• Quality standards criteria that the contractor applies
• Health, safety, and the environment (HSE) policy for the 
contractor and record of the latest report incidents
• Previous experience in the same project
• Equipment 
available
• The time schedule and the overall duration of the project 
completion
The above criteria are more or less important depending on the size and 
type of the project. Some projects have a specific nature. For example, for 
some projects the time factor is very important and an increase in time may 
affect the project. Hotel projects are an example where any delay reduces 
the number of days a hotel is open, which does not achieve any profit for 
the owner. Also, for oil companies, each day represents a loss of the number 
of barrels of oil a day. In those projects, considerable attention and weight 
is given to the schedule and time. In some projects, safety requirements 
may be the most important and, therefore, the safety criteria are the most 
important standards agreed upon between the members of the committee.
The best way to evaluate the bidding is by using the points system to 
determine the best technical offer. In this system, put a degree on each 

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Tendering, Bidding, and Contract Traps 205
item. For example, twenty degrees is put on the duration of the project 
and the technical offer that gives the minimum period of time will take 
the twenty points, then a lesser degree is given to the other contractors 
who provide a longer execution time period. The company, which obtains 
the highest total is the winner, technically. In most cases every company 
has its own point system criteria, which is usually that any contractor 
has a total degree equal to or higher than 70 percent of the degrees or 
60 percent or even 50 percent. If this acceptance percentage value is not 
in the company system, it will be decided through the technical commit-
tee members.
It is important that the table of points and the degree of each item, as far 
as accepting a 70 percent, for example, must be mentioned in the tender 
papers.
The below is an example for a tender evaluation point for a nuclear 
plant.