In dealing with our contractors TAP seeks to ensure:
- Equal treatment of all bidders
- Competitive tendering
- Objectivity, transparency and reliability in our tendering process
Following confirmation by TAP’s shareholders of their Resolution to Construct and the Shah Deniz Consortium’s Final Investment Decision on Stage 2 of its development, TAP is now proceeding with implementation of the project. TAP’s tendering schedule is in full alignment with the upstream developments, specifically the progress of Shah Deniz Stage 2 in the Caspian Sea.
Below is a description of the key work and supply contracts TAP awarded and the main steps in the project’s procurement process.
Overview of contracts awarded by TAP
TAP awarded all large package contracts for onshore and offshore construction of the pipeline as well as other services and items. These contracts fall under one of the three following categories:
Early Works (EW) Contracts
- Construction and rehabilitation of access roads and bridges in Albania [Contract awarded in April 2015]
Company Provided Items (CPI) Contracts
- Line pipes, casing pipes and bends
Large diameter valves [Contract awarded in July 2015]
- Turbo compressors [Contract awarded in September 2015]
- Fibre optic cable [Contract awarded in July 2016]
- Fittings, isolating joints and scraper traps [Contracts awarded in October 2015]
Engineering Procurement Construction (EPC) contracts
- Onshore pipeline construction in Greece and Albania [Contracts awarded in March 2016]
- Compressor stations [Contract awarded in May 2016]
- Offshore pipeline construction [Contract awarded in April 2016]
- Pipeline Receiving Terminal and Italy onshore construction [Contracts awarded in December 2015]
- SCADA systems [Contract awarded in December 2015]
EPC contractors are responsible for hiring sub-contractors to implement specific parts of the contract assignments.
Overview of procurement process
The procurement of key works and supply contracts for the construction of the pipeline was conducted in a phased approach, in line with the schedule set by the Shah Deniz 2 upstream development. Overall, TAP’s procurement followed a two-step process:
- The selection phase
- The contract award phase
1. The selection phase
During the selection phase, TAP ran the so-called ‘pre-qualifications’ aimed at identifying contractors with the required skills, capacity, experience and capabilities to deliver the goods and services TAP was seeking to procure.
Interested parties were required to submit an Expression of Interest (EoI) in line with the requirements set out in the pre-qualification documentation. The EoIs were assessed and evaluated against the selection criteria defined by TAP.
Typical pre-qualification criteria included:
- Financial strength
- Integrity due dilligence
- Local competence (when applicable)
- Relevant certifications related to quality assurance / quality control and health, safety and environment standards.
In April 2014, following a review of its strategy and schedule, TAP decided to re-launch its procurement process and new pre-qualifications for goods and services were initiated. The revised process aimed to provide the maximum opportunity for national and international suppliers to participate in the project. For more information, please read the news release here [News announcement on the pre-qualification re-launch].
2. The Contract Award phase
Companies that meet the pre-qualifications criteria were short-listed and invited to participate in the next phase of the procurement process – the Contract Award Phase.
Selected companies received an Invitation to Tender (ITT). Submitted tenders were evaluated in accordance with the pre-defined criteria and contracts were awarded to the bidder with the Most Economically Advantageous Tender (MEAT). This approach enabled TAP to take into account a number of factors in evaluating the tenders. Typical contract award criteria included:
- Quality of the technical solution
- Execution plan
- Organisation & key personnel
- Contract programme and planning
- Quality assurance / control
- Permitting & Environmental and Social Management
- Bank guarantees