One of the basic principles set out in “The Rio Tinto Procurement Principles” is to secure the best quality/price ratio for Rio Tinto. Tenders and proposals are collected through competitive procedure. Three types of calls for competition are generally used to meet procurement requirements. These three bid solicitation methods presented below contain all the information needed to submit an appropriate offer:
- Request for quotation by e-mail (RFQ via the SAP platform): suppliers are invited to submit prices and deadlines; the award is usually made to the lowest priced technically compliant offer.
- Request for proposal opened through the media or by posting: it is a formal invitation to submit a proposal for a contract with a value greater than $75.000.
- Call for tender: it is a formal invitation to submit an offer for a contract generally subject to specific conditions, of a value greater than $75.000. Of equal technical criteria, HSE and quality, the contract is awarded to the lowest priced offer.
Contracts are awarded on the basis of the best quality - cost – deadline ratio, with consideration of technical, security and environmental specifications, of the respect for the delivery schedule, of the possibility of assuring an after-sales service as well as the availability of spare parts.