Strategic Tender - Production Drilling

Sebastian Rapp
Senior Consultant
Heavy Industry
Strategic Procurement
May 13, 2024
increase mitigated
cost avoidance
contract value

Client Problem

The client was a coal mine operator who's production drilling service provider was consistently underperforming. The contractor was failing to meet drilling requirements due to staff retention and equipment availability issues, causing significant and ongoing operational delays.

Caliba Solution

Caliba was engaged to conduct a market assessment through an Expression of Interest (EOI) to determine the next steps for the sourcing process. The EOI revealed that there were other service providers that had the capacity to meet the requirements, but at a cost increase of 10% compared to the incumbent. The EOI identified significant issues with the incumbent's outdated equipment and non-compliance with maintenance standards.

Based on the EOI findings, Caliba recommended to tender the opportunity and prepared the tender documents, including a detailed scope of services. Caliba managed the Tenderer prequalification process, tender management, shortlisting, negotiation meetings, and prepared the recommendation for award.

The tender resulted in a change of provider with better quality equipment and a larger work force. The potential rate increase was also mitigated, and additional benefits were negotiated for the client including additional equipment when required, other ancillary equipment and KPIs to measure equipment availability and drilling performance. The tender resulted in a cost avoidance of $1.5m pa.

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