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Tender Enquiry Document

Certification of PFS Retail Outlets for the Years 2009-2011

Ref. : RE.HQ. 1/2009-2010 Date: 1/06/2009

Due on: 24/06/2009 Time: 15.00 Hrs.

Confidential Page 1

INDEX

CONTENTS PAGE

A. TENDER DOCUMENT: TECHNICAL

1. Deliverables and Scope of Work

1.1 Company information and Project background .. 2

1.2 Schedule of items for technical bidding. .. 4

1.3 Supply location Audits. .. 6

1.4 Scope of Work .. 6

1.5 Key Deliverables .. 8

1.6 Parameters for PFS RO Certification/Surprise check .. 9

(Annexure A for ROs + Annexure B for COCOs)

1.7 Parameters for Supply Location Certification for PFS .. 10

(Annexure C)

B: TENDER DOCUMENT: COMMERCIAL

2. General and Commercial Terms and Conditions

2.1 Submission of Bid .. 12

2.2 Terms & Conditions of Tender .. 13

2.3 Arbitration clause . . 18

2.4 Mutual Non- Disclosure /Confidentiality Agreement. . .. 20

2.5 Solvency Certificate (To be attached) . . 23

2.6 Price Bid Format. (UN-PRICE BID) .. 24

2.7 Integrity Pact .. 28

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1. DELIVERABLES AND SCOPE OF WORK

1.1 Company Information and Project Background

i. Introduction

Bharat Petroleum Corporation Ltd, (BPCL), a major Public Sector Undertaking, initiated an exercise for its network of Retail outlets towards the end of 1999 with the help of a consultant, to maximize the value from the retail network and promote brand loyalty among the fuelling customers.

An important change initiative was to establish benchmarks in customer service standards and enable the organization to leverage the retail outlet network for competitive advantage in a deregulated market scenario. The initiative has been termed as the “PURE FOR SURE” (PFS) PROPOSITION. In order to ensure that standards can be maintained and improved on a constant basis, BPCL has initiated Certification and Re-certification of retail outlet by using reputed external standardization auditing agency. PFS Certificates are therefore issued based on the audit results.

ii. “PURE FOR SURE” standards

A check list has recently been finalized, based on BPCL’s experience in implementing and improving “PURE FOR SURE” standards. We propose to utilize this with immediate effect as part of the auditing and certification initiative, to maintain standards in PURE FOR SURE retail outlets and in BPCL Company run retail outlets, called COCO outlets. PURE FOR SURE retail outlets have recently been divided into a) Automated PFS RO s and b) other PFS RO s, which distinction has also been reflected in the new Check list. This is enclosed as Annexure “A”.

In nutshell, objective of each of the 5 sections given in Annexure A are as follows:

a. Automated P.F.S. RO s

Consumers should clearly see BPCL as the company that dispenses the right quantity and quality of pure fuel. The ultimate aim must be to inspire trust in BPCL outlets.

In order to ensure Q. & Q. standards on continuous basis across our network, a number of retail outlets are being provided with automation. Details of record are available in Sheet I of the check list enclosed as Annexure A.

b. Other Q. & Q. measures in PFS RO s called Q. & Q. Site checks.

The PFS initiative aims to ensure 100 percent Q. & Q., at every point, starting from the supply point, up to the consumers’ fuel tank. To achieve this, “PFS” has adopted several measures.

These service standards are given as Sheet II of Annexure A.

c. Cleanliness & Environment

A clean and welcoming atmosphere for customers, a healthy environment for the forecourt personnel who provide service, and for the public in general, is another objective under this initiative.

The checklist includes standards required to be maintained by us. These standards are given in Sheet III in Annexure A.

d. Customer Service Standards

Consumers need to be recognized, and made to feel cared for, and concurrently BPCL has to ensure efficient level of services in the retail outlet forecourt The objective of this section of the check list is therefore to ensure a high standard of service- both “internal” standards for BPCL forecourt staff to follow, and “external” standards for consumers to experience.

Checklist for these standards is given as Sheet IV of Annexure A

e. Honesty and Transparency

In order to ensure adequate and timely information to customers, so that consumers can place their trust on the products and services being provided by BPCL, certain initiatives have been taken which can be cross- checked for quality and level of implementation using check list.

The checklist for this is Sheet V of Annexure A.

iii. BPCL COCO retail outlets

In addition to retail outlets under the “PURE FOR SURE” proposition which are managed by Dealerships, BPCL has also taken the initiative to run retail outlets directly. Such outlets are Company owned and Company operated (COCO), and therefore in order to ensure standards, it will be the objective of Certification audits being undertaken by third parties, to ensure that the required standards are being maintained at the highest possible level. Check lists given in Annexure A and Annexure B will be used for this purpose.

1. 2 Schedule of Items for Technical bidding

i. We expect about 4930 Certified PFS RO s and 170 COCO s to retain their certification during 2009-10. In addition to this we will have another approximately 500 new RO s being put up for the first time.

ii. We expect the successful tendering party to draw up Audit Manual based on the enclosed check list , for which no extra cost should be charged to us.

iii. After auditing, each RO will be graded as per details provided in Annexure I.

iv. The geographic spread of PFS Retail outlets covers most of India. Such retail outlets are located basically in i) urban areas like cities/ towns and on ii) Highways, and are located in nearly every State in India. Number of rural RO s that are certified as PFS are limited, as most of them do not have the infrastructure to provide service standards expected in a PFS RO s, and therefore will be few in numbers compared to the other two sectors named above.

v. Printing and issue of PFS Certificates- It is required that the vendor on award of contract, will be printing and issuing the PFS Certificates to each non-COCO retail outlet annually. All 5100 existing PFS Certified retail outlets will need to be issued fresh PFS Certificates after their annual re-certification/ surprise audit. Such a ‘PURE FOR SURE” Certificate should be valid for at least 1 year from date of Audit. However, for COCOs, this Certificate will be issued in each quarter, based on audit results.

vi. It is expected that about 120% of the total network of 4930 dealer operated PFS retail outlets will be subject to surprise / re-certification audit each year. Therefore 5916 “non –COCO PFS RO s” will be audit annually in 2009-2010, and a slightly higher number in 2010-11.

vii. 170 COCO s, will be audited every quarter, making a total of 680 PFS Audits of COCO RO s annually. These RO s, besides being audited using check list given in Annexure I, will also be subject to checking using COCO specific checklist on manning norms and legal compliances as given in Annexure II.

viii. Therefore it is expected that the minimum number of PFS RO related Audits per annum for each of these 2 years, will be approximately 6596 per annum for the 2 years tendered for.

ix. BPCL at its own discretion may ask auditing firm to undertake third party audits at Non- PFS RO s selling 100Kl. or more of product per month @ 1 per year. There are about 700- 750 such retail outlets.

x. Taking the above into consideration, it is projected that approximately 7298 RO s will be audited annually.

xi. It is expected that PFS Audits will be carried out during peak hours indicated for each PFS outlet, in the list of RO s that will be provided by us to the successful Bidder. But this condition will not extend to non- PFS RO s.

xii. It is expected that all arrangements for traveling will be made by the auditing party, and that all expenses on out of pocket/ incidental expenses should be inbuilt into the audit fees quoted by each vendor. All current taxes, surcharge and cess, as maybe applicable , should also be shown as per details given in the Price Bid Document

xiii. It is expected that the successful Bidder (i.e. Auditing company) will supply us with monthly information on the status of each of the following, on formats to be determined based on mutually beneficial discussions.(The template of such M.I.S. will be subject to BPCL’ s approval) :

a. PFS Certified RO s, including COCO s, including SO area, Territory name and Region.

b. PFS Certified Supply locations

c. Graded Automated RO s

d. Non- PFS RO Audit results.

e. Monthly PFS Audit results.

The extra cost, if any, for providing the above information on monthly basis, is to be built into the amount quoted by you in Price Bid.

1.3 Supply Location Audits

We have set up standards, and created an Audit Manual to conduct audits for PFS Certification at our Supply Points, located across the country.

The salient features of the Supply Point PFS Certification Audits to be undertaken by the successful Bidder are as follows:

i. We have about 90 Supply locations around the country, out of which about 60 have undergone PFS Certification.

ii. We expect the number to grow to 64 immediately and 70 by the end of the contract period.

iii. Audits are conducted annually for existing Supply Points.

iv. Fresh PFS Certificate is to be issued by the successful tendering party to Supply locations that have passed Audit requirements on annual basis.

v. You shall quote a single rate for the years 2009-2010, and 2010- 2011, for supply point as per format for Price Bid enclosed. Any escalation that may be contemplated during this period should be clearly indicated by each tendering party, failing which it is understood that the rate quoted will be for the full 2 year period.

vi. All expenses on out of pocket./.incidental expenses, creation and maintenance if monthly/ periodic MIS etc for Supply Point audit should be inbuilt into amount quoted in Price Bid.

vii. The final amount quoted by you should be as indicated in the Price Bid format.

viii. Details of PFS Certification audits/ surprise audits to be undertaken are given in Annexure “C”.

1.4 Scope of Work

i. Preamble

The process standard envisages 3 broad types of audits:

a. For PFS RO s

Existing PFS RO s – PFS Automated, non-Automated PFS and PFS COCO s- will be subject to at least one Surprise audit annually in order to recertify each PFS R.O. Twenty percent of the existing network will also undergone a second surprise Audit. COCO Outlets, as a special case, will undergo four surprise PFS Audits annually, @ one in each quarter.

A fresh PFS Certificate with validity of one year will be issued to each successful R.O. after its annual surprise audit However for COCO ROs; this certificate will be valid only for a maximum of six months. The check lists to be used are given in Annexure A. New RO s put up for PFS Certification will also be subject to audit using this check list.

The following Audits will be undertaken during the PFS Audits:

· Automated RO s will be subject to gradation recommendation by the Auditing party, based on Annexure A.

· BPCL operated COCO RO s will be subject to one PFS Audits per quarter , in order to monitor standards. In addition to Annexure A, COCO Audit will also use Annexure B. COCOs will also be subject to grading recommendations by auditors. The Certificate for such COCO will be issued for each quarter based on Audit results.

b. For Supply Locations

Certification validity is for a year, with surprise audits / Recertification audits being carried out annually. For your information, we are enclosing a typical checklist for Supply Location Audits. (Annexure C).

c. For non-PFS RO s selling 100 Kl or more of product.

Based on the discretion of B.P.C.L., we may require you to undertake third party inspection/ Audit of non –PFS Retail Outlets selling volumes of 100Kl. or more. Check list will broadly be like the one given in Annexure A.

ii. Objective

B.P.C.L. intends to use the services of Certification Agency to:

a. Determine the conformity or non-conformity of quality and service system element that BPCL has benchmarked, through auditing and periodic re-auditing/ surprise audits of retail outlets and supply locations.

b. Grade automated retail outlets according to effectiveness of their Quality & Quantity and service standards, in addition to issuing of PFS Certificates to all successful Retail Outlets under the PFS program.

c. Audit COCO s performance.

BPCL reserves the rights to change the Checklist and frequency of Audits mentioned in the various paragraphs here above at its own discretion without assigning any reasons thereof.

1.5 Key Deliverables

i. Key Deliverables

The key deliverables for the certification process are:

a. Surprise Auditing of RO s and Supply locations.

b. Grading of each RO

c. Providing information and regular M.I.S. as per standard template.