01.Process of substation Tendering, Bids & Proposal
We're exploring the process of,
The customer is preparing to set up a new substation for several reasons, which may include:
Voltage conversion
To meet the load demand
To reduce the distance to the load centers
For Grid integration
For Grid stability
Before starting the project, the customer needs to gather all the detailed information required for successful completion. To ensure accuracy and efficiency, they often collect all necessary data and may hire a consultant to support the entire process—from tendering to project completion.
However, in some cases, the customer may take full responsibility for preparing all the required documents on their own, without external consultancy support.
Tender Invitation
The tender invitation is the process by which a company formally invites potential contractors to submit their bids for executing a specific project.
Once the EPC contractors receive the tender invitation, they acknowledge the customer's request and express their interest in participating in the tender process.
After receiving all the necessary tender documents, the EPCs carefully review the customer’s requirements. Any doubts or uncertainties are clarified directly with the customer during the bidding stage itself to ensure a clear understanding before submitting their proposals.
Stakeholders
Stakeholders are suppliers, vendors, subcontractors, or manufacturers who provide their own equipment or services for the project.
Once the EPC contractor receives all tender-related information, it is shared with the relevant stakeholders to invite their proposals. These stakeholders review the requirements and submit their offers, which typically include pricing, Bill of Quantities (BOQ), technical specifications, and commercial terms.
The consultant prepares comprehensive specifications, technical drawings, and layout plans based on the customer’s requirements. Once these documents are reviewed and approved by the customer, the bidding process begins. Invitations are then sent out to potential contractors, particularly those in the EPC (Engineering, Procurement, and Construction) category.
One of the most important is the Project Substation Single Line Diagram (SLD), which is typically used during the tendering phase. It provides a simplified representation of the electrical layout and key components of the substation.
It’s important to note that while the SLD is crucial for initial planning and bidding, it may undergo some revisions during the detailed engineering stage as the design is finalized.
Now, let’s take a look at the key documents prepared by the consultant based on the customer’s input.
Tender Evaluation: Technical
In the technical evaluation phase, the customer thoroughly reviews each submitted bid to ensure it meets the project’s technical requirements and specifications.
As shown in this slide, six contractors are participating in the evaluation process.
After detailed assessment, the customer may eliminate bidders who do not meet the necessary technical qualifications. In this case, Contractors 1, 2, and 4 are disqualified, while Contractors 3, 5, and 6 proceed to the next stage of evaluation—typically the commercial or financial round.
Tender Evaluation: Commercial
In the commercial evaluation stage, the customer reviews each contractor's bid to ensure it aligns with the project's commercial requirements.
This includes verifying compliance with terms and conditions, payment schedules, warranties, and delivery timelines. Then, the customer compares the total project costs submitted by the remaining contractors.
Typically, the lowest bid is favoured, provided it meets all other criteria. After a few rounds of price negotiations and clarifications, the customer makes the final decision and selects the winning contractor.
Bid Winner
Once the customer selects the winning bid, the contract is officially awarded to that company. This authorizes the contractor to begin work and carry out the project in accordance with the agreed scope, terms, and timelines.
The awarded contractor is now responsible for executing and completing the project as per the specifications laid out in the tender documents.
Bid Submission
After receiving these proposals, the EPC begins compiling and preparing the final bidding documents. Once complete, the entire tender package is submitted for the evaluation process.
