Project Procurement and Negotiation Approach for New Power Plant Projects in Argentina

The Procurement project

Table of Contents
INTRODUCTION...........................................................................................................................3
Question 1........................................................................................................................................3
(a).................................................................................................................................................3
(b).................................................................................................................................................4
Question 2........................................................................................................................................5
(a).................................................................................................................................................5
(b).................................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
Project procurement is a process which states the stages and approaches required for the
successful completion and implementation of projects. This report is based on the case study of
Argentina Power which will provide the solution to two question.
Question 1
(a)
The procurement method adopted by the government of Argentina to obtain various
contracts for the new power plants projects against its competitiveness is bid or tender method.
The bid method for the Power tender is one of the best method because of no nepotism. Tenders
or bids are reviewed by the Argentina government on established criteria such as quality, price
and value for money. Thus, the chance of partiality among the bidders because of the jack is not
at all possible. It is because the tenders and bids of each supplier are heavily examined and
assessed by the public and the project is only given to the bidder that meets the minimum
requirement set by the CAMMESA. The tendering method is also best because it encourages and
promote the competition in the market. The impact of which suppliers will provide the best
quality products and service at lower cost. It is because for the power plant projects, many
contractors and supplier have participated in the bid. Beside this, the government of Argentina
has also set the participation criteria for the bidders (Kang and et.al., 2018).
However, this method also creates various issues for the success of power projects. It is
because insufficient profit margin of the bidders allow them not to spend more money in the
research and development, modern technology and equipment. The impact of which the quality
of the power project will get affected. Beside this, the another issue that may arises from this
competitive bidding is that it is quite time-consuming which affects the customers to large
extent. It means sometime the bid method take too much time such as months or may be a year to
announce a bid winner. The impact of which customers need to wait too long for the proper
power supply in Argentina.
Approach to evaluate and select bidders
The government of Argentina has set the minimum requirements to participate and get selected
in the bid and Auction which are as follows: