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Ghana has guidelines to prevent discrimination in bidding process for oil sector

Apr 10, 2021 News

– Guyana left wide open for abuse in absence of similar protection

By Kiana Wilburg

Kaieteur News – When it comes to the evaluation of bids submitted for the oil sector, Ghana has arguably gone above and beyond to ensure its local businesses are not treated unfairly or discriminated against. In this regard, Ghana has a set of guidelines in place for oil companies to use when evaluating bids received for the supply of goods and services.
These guidelines ensure that local businesses are given first preference and are not shut out because they lack experience.
Following a perusal of that African country’s legislative and regulatory framework for the oil sector, this newspaper found that Ghana’s Petroleum Commission is the body that is charged with establishing the bid evaluation guidelines in accordance with applicable laws and regulations for ensuring that the year on year progression of local content are met.
Further to its powers to determine the said guidelines, Ghana has made it clear that oil companies are not allowed to disqualify any local business on the basis that they are not the lowest bidder. Its regulations state “where the total value of the bid of a qualified indigenous Ghanaian company does not exceed the lowest bid by more than 10 percent, the contract shall be awarded to that indigenous Ghanaian company.”
Additionally, Ghana has made it clear that during an evaluation of bids, the bid containing the highest level of local content shall be selected. Furthermore, where a non-indigenous Ghanaian company is interested in providing goods and services to a contractor, subcontractor, licencee, or other allied entity in the oil sector that foreign company must “provide the goods and services in association with an indigenous Ghanaian company, where practicable.”
The foregoing protective measures are also strongly supported in Ghana’s Local Content Policy too.
It should be noted, that the extent to which Ghana goes out of its way to ensure local businesses are not treated unfairly or placed at a disadvantage by oil companies and their often times skewed procurement rules is in stark contrast to what obtains in Guyana.
Here, oil companies get to determine the procurement rules local suppliers must play by. In fact, local companies can be rejected for any number of reasons they deem appropriate.
Just last weekend for example, Kaieteur News reported on how a local manufacturing company was snubbed by an ExxonMobil contractor after it submitted an Expression of Interest (EOI) for the provision of Personal Protective Equipment (PPE) such as vests, hats, and gloves.
Despite joining forces with W.W Grainger, an internationally recognized supplier of PPE, the local company was still told that it was not eligible to submit a bid. The Guyanese company, which was hopeful of getting a foot into the oil industry, was rejected on the basis of having zero experience in supplying the industry with PPE.
In an email seen by Kaieteur News, SBM Offshore said, “Dear (withheld on request for anonymity) Thank you for your email. We had to run our technical pre-selection amongst a significant number of suppliers and based on the feedback that your company provided, your company has not been approved for applying to this tender. Immediate justification that I received from the team was the lack of previous experience(s) in supplying PPE within the Oil and Gas industry and in Guyana.”
Speaking with Kaieteur News, the medium sized manufacturer said it is quite astonishing that after partnering with W. W. Grainger, Inc, an American Fortune 500 industrial supplier founded in 1927, it had thought that it would have been able to prequalify. The local firm said it was flabbergasted to learn that it could not tender for the contract because it had no experience. “How do you expect the small man to benefit from the sector when he can be shut out for not having experience in a sector that is new to the country? How do you expect the small man to have experience in the first place? We are being told to ready ourselves and form partnerships and invest our money but when we do, we are shut out because of lack of experience. This needs to be addressed,” the local company had expressed.

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