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Define the Tender Process

Reported by: Rebecca Hughes

In 2001, Thomson County was named by
National news magazine as "the windiest county
in the USA." It was then that the Thomson
County Council had the idea to use this
dubitable distinction to increase county
revenues with wind power. The idea of
generating electricity with an array of wind
turbines made perfect sense for the county,
which sometimes struggled to support its
county programs. It would be a great way to
add naturally generated, sustainable power into
the national power grid, while at the same time
gaining a long-term revenue stream for the
County Council budget.
After lobbying the state government for 12
months, in May Thomson County finally
received a state loan for the funds it needed to
build this sustainable energy source within the
county region. In June, the county initiated the
Wind Farm Energy Project for the purpose of
creating a natural, renewable, sustainable
energy source in the district of Thomson
County. This three-year project required the
construction of 16 wind turbines mounted onto
200-foot high steel towers. At this height, the
wind turbines could achieve wind speeds high
enough to generate a total of 11 MW of
electricity. The farm's electrical product would
then be routed via an underground cable to the
25 kV distribution lines that are connected to
the national electrical grid. By creating and
commercializing a nonpolluting source of
renewable energy, the council hoped to
generate a substantial profit margin, which
could in turn be reinvested into the local
As the Project Manager elected on behalf of the
Thomson County Council, I was personally
responsible for the success of this project. As
the council did not have the skills and
competencies required to deliver this project
internally, I decided to outsource the project
delivery to an external supplier. To ensure that
we selected the best available supplier for the
project, I was tasked with undertaking a formal
Tender Process to identify, review, select and
contract a preferred supplier. The following
Tender Process was defined and agreed to by
the Project Board:

Case Study Profile

Project Name:

WindFarm Energy


Thomson County

Project Type:

Power Generation

Project Manager:

Rebecca Hughes

Project Activity:

Define the Tender


This Case Study provides an example

of a Tender Process for a power
generation project. The project, people
and organizations described are purely

Wind Farm Energy Project

Tender Process
1. Overview
The Thomson County Council has commissioned the construction of a wind farm capable of
generating 11 MW of electricity for supply to the national power grid. The council has
decided to contract an external supplier to carry out the majority of the effort required to
complete this project. Therefore, to ensure that the best available supplier is appointed to
this project in a fair and efficient manner, we will undertake the a formal Tender Process.
The purpose of the Tender Process is to describe and implement the steps needed to select
and contract a preferred supplier to the project. The three key steps are:
Issue a Request for Information
Issue a Request for Proposal
Issue a Supplier Contract

A detailed description of each step is provided in the following sections.

2 Issue a Request for Information

The first step is to define exactly what it is that we wish to outsource to an external
supplier. With this definition, we will then release a Request for Information, to gather
information from potential suppliers about their companies and their individual approaches
to the project. This process will include the following procedures:
Specify the Statement of Work
We will first document the detailed outsourcing requirements of this project in a Statement
of Work (SOW). The SOW will define exactly what it is that we wish to achieve by
outsourcing the design and construction of deliverables for this project. It will describe the
scope of the work to be outsourced by listing the activities and deliverables the chosen
supplier must complete. It will define the responsibilities of both the supplier and the
Thomson County project team in producing, reviewing and accepting the project
deliverables. And finally, it will list the supply terms such as those relating to supplier
payments and deliverable acceptance.
Create a Request for Information
After we have specified in the SOW, exactly what it is that we will outsource, we will provide
suppliers with the opportunity to make a formal (tender) proposal for the work, by creating
and distributing a Request for Information (RFI). The RFI will inform interested suppliers of
the outsourcing needs of the project, the tender process timeframes and the steps they
must take to register a formal interest in servicing the project. The RFI will also provide
suppliers with the specific information required by the project team to create a supplier
shortlist such as the supplier's business operations, services offered, existing customers and
references from similar projects they have completed.

Issue the Tender Documents

When the SOW and RFI are complete, we will release them to the supplier community by:
Publishing this tender in the Government Tender Gazette
Contacting a list of the suppliers known for their experience delivering Wind Farm
Advertising the tender in Wind Energy magazines, websites and newsgroups
Advertising the tender on our Thomson County Council website
Disseminating press releases on this tender to gain press coverage

Review the Tender Responses

We hope that, due to the innovative, ecological nature of this project, this tender will attract
responses from a large number of high-caliber organizations worldwide. The Project
Manager will establish a Tender Committee for the WindFarm Energy Project to review all of
the responses received. The criteria against which each tender response is evaluated will be
predefined to ensure that the review is as objective as possible. In order to keep track of
the current status of each tender document and supplier response, we will use a Tender
Register to record the details of each tender item.
Select a Tender Shortlist
After reviewing our responses from interested suppliers, we will create a supplier shortlist
with the five strongest candidates. We will then notify all other suppliers that they have
been unsuccessful and that the name of the successful candidate will be published upon
completion of the tender process. Short listed suppliers will then be notified of their
selection and invited to proceed to the next phase of the tender process.

3 Issue a Request for Proposal

With a shortlist of potential suppliers, each of which is highly suited to the needs of the
WindFarm Energy Project, our next step will be to issue to them a Request for Proposal
(RFP). The RFP process will include the following procedures:
Create a Request for Proposal
From the responses to the RFI, we will have gained insight into each of the short listed
companies from whom we will now request proposals. We will know the general purpose of
their companies, as well as their offerings, competitors and target markets. We now need a
detailed proposal from each to enable us to select the project's preferred supplier.
Documenting and issuing a Request for Proposal (RFP) allows us to specify preferred
supplier information needed from each short listed supplier in the form of a proposal in
order to make our final decision. This information should include a comprehensive
description of the supplier's company offerings, capabilities and experience, as well as its
proposed solution and approach towards implementation of the WindFarm Energy Project.
Release Request for Proposal
With permission from the Project Board, we will distribute the RFP to the shortlist of
suppliers. In the event that the SOW has been updated to reflect any changes in the project
requirements, this updated version will be included along with the RFP. The suppliers will

then have a limited amount of time (as specified in the RFP) to respond with a formal
proposal for the supply of the deliverables required by this project.
Review Tender Responses
All short listed suppliers will submit their tender proposals directly to the Project Manager,
who will forward them to the Tender Committee for review. Depending on the quality of the
responses submitted, the Project Manager will probably organize a round of supplier
presentations, in which each supplier can personally present its proposal to the Tender
Committee and clarify any areas inadequately addressed in its proposal.
Select Preferred Supplier
With a detailed understanding of the solutions proposed by these suppliers, the Tender
Committee will then review each solution, rank it against predefined review criteria, and
choose a leading candidate. The Project Manager will present these results to the Thomson
County Project Board, which will be the final authority for approving the preferred supplier

4 Formalize a Supplier Contract

With board approval, we will then negotiate and endorse a contract for the supplier to
provide the physical deliverables required to establish the WindFarm within our county.
Create the Supplier Contract
The first step in formalizing a contract will be to draft this contract to define the scope of
work required to meet our requirements. The contract will explicitly list the responsibilities
of both Thomson County and the preferred supplier to ensure that the roles of each party to
the contract are clear.
Negotiate the Supplier Contract
The contract will be offered to the preferred supplier, and the terms and conditions of the
contract negotiated by both parties.
Sign the Supplier Contract
Once the terms of the contract are agreed to in principle, a final contract will be drafted and
presented to the Thomson County Project Board for approval. The Project Sponsor and the
supplier will then sign the contract and thus the contract terms will be initiated.
This completes the description of the procedures we will peform to select and contract a
preferred supplier for the WindFarm Energy Project. By formally completing this tender
process, we will be able to select the best supplier available in a fair and efficient manner,
thereby increasing our chances of undertaking a successful project for Thomson County.
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