Under the PSC, a management committee shall be established within thirty days following the effective date of the contract and shall consist of two representatives of the IOC along with two representatives of the Ministry of Natural Resources (MNR). The committee is chaired by one of the two MNR representatives, who will practically have the final decision in all matters where a unanimous vote of the committee is not required as set forth in the PSC.

Subsequently, the IOC must submit its suggested procedures for procurement of equipment, materials or services, for the management committee’s comments and reviews. The procedures are considered final following a unanimous vote by the committee or in case no amendments were requested within thirty (30) days of submittal.

Furthermore, the IOC shall present a yearly work program and budget to the management committee, based on which all costs are approved, with only a small amount of not budgeted expenditures (usually 10% of the initial budget) allowed, above which the unanimous approval of the management committee will be needed for any additional costs.

Under the PSC, a management committee shall be established within thirty days following the effective date of the contract and shall consist of two representatives of the IOC along with two representatives of the Ministry of Natural Resources.

The abovementioned requirements are stipulated for in each PSC but the MNR has in practice managed to relatively unify the procurement procedures for all IOCs, which can be summarized as follows:

  • A threshold generally ranging between $100,000 and $500,000 is agreed upon with each IOC. Any contract with a supplier surpassing the set amount needs to be tendered out. All direct contracts, with a value below the threshold, need to be notified to the management committee with a justification for the choice of supplier and a proof of the supplier’s registration at the MNR’s as an approved vendor.
  • The procurement department at the IOC submits an official request to the MNR whenever a contract needs to be put out to tender. The request must detail the scope of work of the contract and its budget, along with other details, and would ask the MNR to provide the procurement department with a list of approved vendors for the related scope of work.
  • Consequently, the IOC can choose to send out the tender documents to some or all of the approved vendors. The list of vendors receiving the tender documents must be presented to the MNR. In some cases where a prequalification is conducted by the company, the list of approved vendors that successfully prequalified must be submitted to the MNR before releasing the tender documents.
  • Following the timely receipt of the participants’ bids, the management committee shall meet to open all the received submissions. After this meeting, the IOC can then proceed to a thorough examination of the technical and commercial components of every bid in order to reach a decision regarding the order of preference of all bids. Usually the assessment process follows a points system used to be able to eventually provide the management committee with a ranked list of bidders along with the justification and explanation of the provided order of preference.
  • Afterwards, the management committee deliberates about the tender and the ranked list provided by the IOC in order to choose the winning bidder, which is the sole right of the management committee regardless of the IOC’s order of preference. Nevertheless, considering each of the four members of the committee holds only one vote, and, the chairman entitled to the tie-breaking vote, the IOC representatives in the committee practically have an advisory role only, where their opinions and votes can only influence but not decide the choice of the winning bidder.