6 Steps To Bidding On Decommissioning Projects

Asset Retirement Obligation Series

Start The Bidding On Decommissioning Projects

Earlier this month we discussed how to avoid later crises by laying the right groundwork for your decommissioning project now. These best practices include reviewing project documentation, making a site visit, preparing cost estimates and submitting your permits.

As a result of proper project planning, you’ll have not only detailed cost estimates, but a decommissioning schedule indicating when each piece of your project will take place.

Now, it’s time to contact vendors and start the bidding on your decommissioning project.

6 Steps To Start The Bidding

Step 1: Make A List

Before contacting potential vendors it’s important to be clear on the activities that need to be bid. Review your decommissioning schedule and consider the entire project, don’t forget:

Surveying for pipeline abandonment details and debris removal
Well plugging and abandonment
Platform removal preparation
Platform severing and removal
Site clearance verification

Step 2: Determine Vendor Roles

There are several vendor setup options for your decommissioning project. You can manage the full process and request individual bids for each part of the project. If you’d prefer less direct involvement, you can select one firm to serve as prime contractor and ask them to take on the responsibility of managing subcontractors for each part of the process. Or, you can create an option in between that allows for you to control some pieces while releasing others to contractors.

Step 3: Set Qualified Bidder Criteria

Identify what is required from potential vendors to be qualified to work on the project. Typically, the qualifications will include a specific HSE record, measures of financial stability and performance, and the availability of vessels and equipment, among other factors. Also, determine whether the vendors you plan to contact have existing MSAs with your company, this can be a key factor in getting work started quickly.

Step 4: Stay Organized

The key to success in bidding is to stay organized and make it easy to track and maintain all the documentation for each bid request sent out. Gather all your project documentation, prepare scope of work documents for each piece of the project and assemble bid packages with all relevant drawings, photos, schematics and final bid forms.

Step 5: Send Out The Bids

Send the bid packages out to qualified bidders and be available to answer questions until the bid deadline has closed.

Step 6: Make The Award

Once you’ve identified your preferred vendor, verify that they can truly deliver the project as stated in the bid. Also, if you’ve selected a vendor without an existing MSA with your company, a new MSA will have to be completed before you can move forward. Once the MSA is complete, prepare the PO or contract and consider including a punitive clause in the contract for non-performance. Review the signed contract, set project start dates and get to work.

Always consider that a decommissioning job gone wrong can have long lasting and expensive ramifications. When selecting a vendor, consider that it might be worthwhile to invest in quality instead of just awarding work to the low-cost vendor.