Abstract

The commercial team of Valor India Limited came across a Notice Inviting Tender (NIT) for providing transmission solutions to two projects. The company has to take a decison on bidding for the projects based on the risks and cashflows expected out of the projects. Adding to the general risks in any project are project specific risks very common in emerging countries. Previous experiences and qualitative judgement play a very important role in judging whether to bid for the projects or not. The case takes you through the decision making process in a transmission solutions provider and also goes into details of how the bidding costs are arrived at to give the bid manager leeway in placing the bid.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• To know where exactly the transmission solution company fits in the energy sector and what kind of products and services such companies offer.
• The debate the various qualitative and quantitative factors in arriving at the decision to bid for a project
• To evaluate the general and specific risks inherent in the projects and especially the projects in the developing and least developed countries.
• Evaluating the steps in arriving at a minimum bid price for the project
• Understanding the various costs that are involved in the calculation of bid price, how these costs are calculated and how does each one of them affects the final price of the bid.

Keywords

Energy Sector, Transmission solutions, Tender Bidding, Project, Request for Proposal, Electrical Equipment, Bidding price, Small and Medium Enterprise, Renewable resource, Fossil Fuel, High Voltage Direct Current, Civil works, Liquidity Damage, Statutory Variations, Percentage of Completion, Limits of Authority, Inflation Cost, Project Management Cost, Service Cost, Greenfield Brownfield