Case Study - How a Construction Conglomerate revolutionized Tender Risk Analysis

05 February 2021

Tender Risk Analysis Process Automation

INTRO

The Client is a EPC Company, part of a Multinational Conglomerate, with presence in over 30 countries.

In addition, the client has a long history of servicing businesses and governments in varied domains. Their domain expertise spans across different industries- Hydrocarbon, Power, Oil, Gas, Defense, Ship building, and so on – and has a huge economic impact around the world. The company has to analyze tender documents, especially risk clauses, to identify the right projects to bid on. Tenders are voluminous and can be thousands of pages long. Responding to such tenders in a timely and accurate manner is a labor-intensive effort.

PROBLEM

Subjective risk analysis - Many of the risk analysis mistakes were associated with negligence, misrepresentation, and fraud. Studies showed that frequent mistakes were also made in calculation, clerical errors, wrong assumption, and document errors.

Being blind to hidden risks - The customer was approaching bids with false confidence without realizing the landmine of underlying hidden risks that were never uncovered. This was leading to disappointment as they mistakenly omitted real risks that influence the contract value and lead to failure in execution.

PAIN POINTS

  • The tender analysis team was spending valuable manual hours reading, understanding, and extracting information from tender documents. Despite their expertise, the enormity of the task kept the team busy with redundant reading tasks and left very little time for the actual task of responding to the tenders. On an average, the team spent 10 to 15 days on analyzing a single tender document.
  • In addition to the paucity of time, the margin of error associated with manual tender analysis was very high. Information provided in tenders is dense, scattered, and at times even footnotes had crucial information. Given this, chances of missing out on finer details are high. For example, missing out on a clause like Liquidated Damages and Termination can result in huge losses.

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