For any large oil and gas company, the estimated cost is the very basis of a tendering process for equipment and services.
8Price reasonability is established on the basis of a reserve price.
8What is more, an estimated cost matrix is the basis for all planning and budgeting and a large company like ONGC cannot get that wrong.
8In this context, ONGC has now re-circulated the following broad guidelines that will help its various divisions to come up with the price estimate:
--Preparation of cost estimates is primarily responsibility of the indenting division and for highly complex procurement and limited internal capability, an external consultant can be used for cost estimation, The internal cost estimation team should apply their own due diligence subsequent to a report submitted by the consultants to arrive at the final cost estimate.
--The estimated cost should be realistic, logical and scientific and should reflect the true market conditions as far as possible
--.Before the preparation of cost estimates, the scope of work specifications are to be clearly defined and cost estimates should be based upon the specific requirement of the job.
--In case of procurement of materials, the last purchase rate (LPR) should be considered for reference, but the actual market scenario must also be taken into account. Suitable escalation or reduction must also be considered over the LPR considering the time lag from the LPR date, the rate of inflation, foreign exchange rate fluctuation and changes in taxes and duties.
--In case of procurement of chemicals, cost estimates of each type of chemical should be prepared separately instead of putting alt or group of chemicals together.
For more details visit indianpetroplus.com
8Price reasonability is established on the basis of a reserve price.
8What is more, an estimated cost matrix is the basis for all planning and budgeting and a large company like ONGC cannot get that wrong.
8In this context, ONGC has now re-circulated the following broad guidelines that will help its various divisions to come up with the price estimate:
--Preparation of cost estimates is primarily responsibility of the indenting division and for highly complex procurement and limited internal capability, an external consultant can be used for cost estimation, The internal cost estimation team should apply their own due diligence subsequent to a report submitted by the consultants to arrive at the final cost estimate.
--The estimated cost should be realistic, logical and scientific and should reflect the true market conditions as far as possible
--.Before the preparation of cost estimates, the scope of work specifications are to be clearly defined and cost estimates should be based upon the specific requirement of the job.
--In case of procurement of materials, the last purchase rate (LPR) should be considered for reference, but the actual market scenario must also be taken into account. Suitable escalation or reduction must also be considered over the LPR considering the time lag from the LPR date, the rate of inflation, foreign exchange rate fluctuation and changes in taxes and duties.
--In case of procurement of chemicals, cost estimates of each type of chemical should be prepared separately instead of putting alt or group of chemicals together.
For more details visit indianpetroplus.com
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