29 Nov 2018

UNREASONABLE PRICE OFFER IS THE TENDENCY TO TENDER FAILURE

In the world of projects and business, the term “tender” is something commonly found. A tender is a series of bidding activities that aim to select, obtain, determine and appoint which company is more appropriate and feasible to work on a work package. The term is an Explanation of Law Number 5 of 1999 Prohibition of Monopolistic Practices and Unfair Business Competition. Referring to the definition of the tender above, the activities in it are not only limited to price bidding activities, but also in practice the tender consists of various core activities, namely price bidding (Quantity) and technical / material offers (Quality).

Activities of Price and technical/material bidding are important in the tender process because prices and technical materials are related to causality, where prices can determine the technical/material quality given later. Often in practice are several cases of ineffective tenders. This was explained by Syahrir in the EPC Workshop:

(Photo of Pak Shahrir)

“There are often honorable individuals who offer an ineffective tender price, offering unreasonably cheapest prices, which in turn will use materials of low quality. This can lead to unfair business competition”

The effort the tender owner is expected to do if he finds such the party is to offer the tender to another party to thwart that ineffective tender process.

Therefore, tender participants must be careful in determining prices so as not to harm the tender owner. A tender owner must look at the price offer given by the bidder by comparing the quality of the goods provided and the price offered.

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