Pipeline project a tender issue

Pipeline project a tender issue

I refer to the article in your paper of Feb. 1 entitled "House
member finds fault with Natuna pipeline project."

According to Indonesian regulations, no one, including Mr.
Nasution, should have had access to any price information at the
time. Your average reader might miss the subtle, but critical
implication, regarding the law.

Your article clearly quotes Mr. Nasution as saying "and
Daewoo, had high skills and had offered very competitive prices".
In the last sentence of the same article the reader finds out
that the invitation for the commercial submissions have not even
been released yet.

But according to the rules set forth in Indonesia's
Presidential Decree Keppres 16, and Pertamina BPPKA's Bulletin
077 governing the tendering process, it would be impossible for
anyone to make price comparisons when your article clearly stated
that the commercial submissions of the contractors in question
had not been made at the time of Mr. Nasution's complaint. Only
by going outside the rules of Indonesian regulations for
tendering could anyone have had relevant information at the time
regarding prices. If Daewoo offered competitive prices, we must
ask what these prices were, what they are competitive with, when
were these prices offered, and who were the prices offered to?

Further, it appears the Natuna project managers have selected
the Indonesian "Two Phase Method" for tendering, (one of the
three methods available within Keppres 16). This two phase method
is common on extremely complex projects such as the one described
in your article, and allows much flexibility in negotiating the
technical requirements of the project. But the key reason for
allowing such freedom in negotiating technical requirements,
prior to receipt of commercial submissions, is to ensure the
project's technical success, and to identify and eliminate the
contractors that cannot meet the technical requirements. This
elimination should be performed without commercial influence.

Having rules to guide us is good, but having officials who are
allowed to operate outside and independently of the rules is bad.
The act of obtaining and using tendering information prior to the
commercial tender submission undermines the intention of the
regulations, such as Keppres 16. If your article is accurate in
stating that the commercial tenders had not been released at the
time Mr. Nasution was making his claims, then it also begs
another much larger question: How do companies, such as Hyundai,
Daewoo, or anyone else, reach and influence House members prior
to commercial tender openings?

BRUCE M. KENNEDY

Jakarta