Changes Brought by Integrated Tendering for Distribution Transformer Platforms

On October 10, 2015, the e-commerce platform of the State Grid Corporation of China (SGCC) released an announcement – the SGCC Advance Notice on Integrated Tendering for Distribution Transformer Platforms, which confirmed the industry-wide rumors of integrated tendering for distribution transformer platforms.

The full text of the announcement is as follows:

To all potential bidders:

In order to achieve standardized design and integrated procurement for distribution transformer platforms, SGCC will launch integrated tendering for distribution transformer platforms starting from the third batch of distribution network equipment agreement inventory tendering in 2015, based on the 2015 Edition of Typical Design Scheme for 10kV Pole-Mounted Three-Phase Transformer Platforms. Relevant matters are hereby announced in advance as follows:

I. Scope of Application

(I) Applicable Projects

1. For complete distribution transformer platforms adopting the new typical design scheme in SGCC’s newly-built or renovated distribution networks (including urban and rural networks), integrated tendering shall be implemented in accordance with the design principle of “standardized platform, modular components.”
2. The following projects are excluded: those adopting the original typical design scheme for distribution transformer platforms and within the performance period of agreement inventory contracts; technical renovation or overhaul projects involving single equipment or materials of distribution transformer platforms.

(II) Material Categories

A distribution transformer platform is divided into the following four modules:

1. Distribution transformer module: distribution transformer, high-voltage fuse, lightning arrester;
2. Low-voltage integrated distribution cabinet module: cabinet body, intelligent capacitor bank, molded case circuit breaker, measuring current transformer, etc.;
3. Pole module: cement pole, base plate, anchor plate;
4. Accessory module: cross arm, double-pole support frame for transformer, insulated wire or cable, hoop, bolt, terminal block, etc.

For the specific scope of each module, please refer to the material procurement standard announcement on the e-commerce platform.

II. Tendering Rules

(I) Packaging (Lot Division) Methods

Two packaging methods are adopted based on the degree of integration:

• Method 1: The distribution transformer, low-voltage integrated distribution cabinet, and accessories are bundled into a single lot, i.e., the integrated distribution transformer platform equipment; the pole module is tendered separately.
• Method 2: The four modules are tendered separately. The low-voltage integrated distribution cabinet and accessories shall still be tendered under the model of “unified organization and supervision by headquarters, specific implementation by provincial companies.”

Initially, each provincial (autonomous region, municipality directly under the Central Government) power company under SGCC may independently select an appropriate packaging method. Starting from SGCC’s second batch of distribution network equipment agreement inventory tendering in 2016, Method 1 shall be uniformly adopted for integrated tendering and procurement.

(II) Qualification Requirements

Neither of the two packaging methods will adjust the existing qualification requirements for each material category. For Method 1 (integrated distribution transformer platform equipment) and Method 2 (distribution transformer module), the bidder shall be a distribution transformer supplier. Other materials within the lot may be outsourced or subcontracted, provided they meet the corresponding qualification requirements.

(III) Evaluation Methodology

1. Commercial Evaluation
   A comprehensive evaluation of bidders shall be conducted from three aspects: preparation of bidding documents, financial status, and performance evaluation of bidders.
2. Technical Evaluation
   A comprehensive evaluation of bidders shall be conducted from two aspects: “equipment performance” and “integrated capability.” Evaluation factors for “equipment performance” include technical level, resource strength, component materials, etc.; evaluation factors for “integrated capability” include integrated manufacturing capability, after-sales service, technical operation and maintenance support capability, etc.
3. Price Evaluation
   The bidirectional curve method based on average price reduction shall be adopted. A maximum bid price limit shall be set for key equipment, or a calculation method shall be established to reject bids with positive deviations from the lot price.

III. Notes

1. Joint venture or consortium bids are not accepted.
2. If a bidder selects an outsourced or subcontracted product manufacturer that is currently subject to suspension or disqualification from bidding under the SGCC Detailed Rules for Handling Supplier Misconduct, the bidder shall bear the risk of bid rejection.
3. All tendering matters shall be subject to the final official bidding documents.

IV. Timeline

For SGCC’s third batch of distribution network equipment and materials agreement inventory tendering in 2015:

• Expected announcement date: early November 2015;
• Expected bid opening date: late November 2015.

Relevant suppliers are advised to pay close attention to updates on the e-commerce platform in a timely manner.