Strategic Tender - Heavy Equipment Hire Panel

Lachlan Brown
Heavy Industry
Cost Reduction
June 4, 2024
Spend Under Contract
Hire Agreements Established
Cost Reduction p.a

Client Problem

The client was a contract minder and had ambitious growth targets set and was unclear on future fleet requirements. To minimise risk,there was a need to establish a panel of contracted suppliers.

Caliba Solution

Caliba was engaged to complete an organsiation-wide cost reduction project. A key category within this project was the hire ofheavy mining equipment (HME), with different size fleets and equipment required at all client sites. Annual spend was $44m.

After being rapidly awarded new contracts, the client had been reactively approaching the market on an asneeded basis to achieve production targets, creating a web of smaller providers with differing agreement structures, rates and terms.

Caliba conducted a review of the current contracts and worked with the assets and estimating teams to determinea one year forecast of requirements. Caliba led a tender with these requirements with the goal of establishing a panel of HME Hire providers.

The tender identified several national providers with the capability and capacity to meet future requirements of all equipment types. The outcome was a panel of providers on standardised terms with agreed KPIs, SMU Hours, and capped hire rates for the 5-year term. Based on the forecast requirements, this was an estimated saving of $2.34m per annum.

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