Participating in tenders is one of the efforts to increase business value and expand network. As for the types of companies that can become bidders, namely all micro-, small-, medium- or large-business entities that are administratively legal. In addition, if the company is going to participate in a tender, it must be ready to always open up insight and knowledge about various things, especially those related to price information. Participating in a tender has terms and conditions that apply, this is to facilitate the filtering process by the tender supervisory body.
Governing law and regulation
- Presidential Regulation (Perpres) No. 38/2015 concerning Government Cooperation with Business Entities in Infrastructure Provision
- Regulation of the Minister of National Development Planning/Head of National Development Planning Agency (Permen PPN/Bappenas) No. 4/2015 concerning Procedures for Implementing Government Cooperation with Business Entities in Infrastructure Provision as amended by Permen PPN/Bappenas No. 2/2020 concerning Amendments to Permen PPN/Bappenas No. 4/2015
- Regulation of the Head of Government Goods/Services Procurement Policy Institute No. 29/2018 concerning Procedures for Implementing Procurement of Business Entities Implementing Infrastructure Provision through Government Cooperation with Business Entities on the Initiative of Ministers/Heads of Institutions/Heads of Regions (LKPP Reg No. 29/2018)
Typical procurement or tender proccess
Under Presidential Regulation (Perpres) No. 38/2015 and LKPP Regulation No. 29/2018, the procurement process in a PPP (Public Private Partnership) project involves the following stages:
- Prequalification. Prequalification Documents and a Request for Proposal are prepared by the person in charge of the cooperation project or the Government Contracting Agency (PJPK). In a PPP project the PJPK may be:
- government;
- regional administration;
- a state-owned enterprise; or
- regional-owned enterprise.
- In the prequalification stage, the administrative requirements, technical and financial abilities of the bidders will be assessed to determine if they advance to the tender/direct appointment stage.
- Tender or direct appointment. If more than one business entity passes the prequalification stage, procurement is conducted through a tender process. There are two types of tender:
- one-step tender: the bidders concurrently submit envelope I (containing administrative and technical offering documents) and envelope II (containing financial offering documents). The PJPK evaluates the envelopes and subsequently announces the tender winner; and
- two-step tender: the bidders are required to submit the offering document. The PJPK then evaluates the submissions and announces the results, followed by a discussion to optimise the offering document based on the evaluation. The bidders then submit the optimised offering document. The PJPK again evaluates the submissions and subsequently announces the tender winner.
- If only one business entity passes the tender prequalification stage, procurement is conducted by direct appointment. A direct appointment can also be made in a PPP project if:
- it relates to infrastructure the business entity previously developed;
- the work can only be done using new technology that only one business entity is able to apply; or
- the business entity possesses the majority or all of the land required for the PPP project.
