Acquiring Technology Through Tendering- Challenges

ABSTRACT In a technology intensive industry like ours – Petroleum Industry, Technology is acquired for commercial benefits, technical enhancement, environment protection and the like. Mechanisms to acquire technology include collaboration, consultancy, pilot project execution, membership with professional bodies. Majority of the Organizations are accountable to shareholders, partners, public and Governments to prove commercial prudence of its actions. Therefore, it is necessary for the Organizations to ensure and establish through documented process that best value of the invested cost has been achieved. Organizations are also ethically and procedurally bound to provide level playing field to all potential technology providers. To comply with these commercial obligations, tendering process is often mandatory. Tendering process in its different variants has proved successful, robust and is time tested. Therefore, whatever mechanism (collaboration, consultancy, pilot project etc.) we use, it often becomes necessary to acquire technology through tendering process due to commercial obligations. While tendering process has evolved and proves successful for acquisition of all kind of Services and Works, it poses challenges when we attempt to acquire technology through tendering because Technology acquisition has unique characteristics and attributes which do not align with principles of contracting. There exist various technologies with their own pros and cons for similar objective. They have different kind of deliverables and processes. Risk and benefits associated with technologies vary. Some technologies being in nascent stage cannot be relied for assured success but still, to update and upgrade Organization's technical capabilities it is necessary to give them a try. Sometimes it is the Organization that desires to try such nascent technology and sometimes the technology provider solicits to try their technology. Some of the technologies are patented and have the risk of landing up with single source in future and thus have risk of commercial exploitation. Often technology providers have apprehensions to submit bids when invited through tendering. What if after collecting all information and their method statement the tender is cancelled and the tender is re-issued exposing them to compete with conventional technologies or cheap technologies. Usually they are confident of superiority of Technology but are skeptical about commercial competitiveness. Therefore the technology providers often feel that participation in tendering process shall defeat the very purpose of prompting the Organizations to try their technology. Technology providers include non profit making organization and academic institutions who are not comfortable with complex tender conditions. They get discouraged by tendering process. The technical professionals are always very enthusiastic to try new technology and have focused objective to try and evaluate new technology. Technical fraternity is put off by procedural complexities due to commercial obligations. I call it procedural complexities because acquisition of technology is not an established and well understood stereotype tendering exercise. Each acquisition of technology is unique and has permutations and combination of factors mentioned above. An attempt has been made in this paper to analyze issues mentioned above and to discuss various ways to address them. Thus minimize the gap between expectations of Technical Fraternity and Commercial obligations of the Organizations