Identifier
Created
Classification
Origin
06ALGIERS570
2006-03-29 17:00:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Algiers
Cable title:  

BECHTEL POISED TO PREVAIL IN BID PROCESS FOR

Tags:  EINV BEXP ELTN ETRD AG 
pdf how-to read a cable
VZCZCXYZ0024
PP RUEHWEB

DE RUEHAS #0570/01 0881700
ZNR UUUUU ZZH
P 291700Z MAR 06
FM AMEMBASSY ALGIERS
TO RUEHC/SECSTATE WASHDC PRIORITY 0697
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHRB/AMEMBASSY RABAT 1246
RUEHTU/AMEMBASSY TUNIS 6096
RUEHFR/AMEMBASSY PARIS 1724
RUEHLO/AMEMBASSY LONDON 1196
RUEHCL/AMCONSUL CASABLANCA 2662
UNCLAS ALGIERS 000570 

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EINV BEXP ELTN ETRD AG
SUBJECT: BECHTEL POISED TO PREVAIL IN BID PROCESS FOR
CONSTRUCTING AT LEAST ONE SEGMENT OF THE EAST-WEST HIGHWAY

REF: ALGIERS 168

UNCLAS ALGIERS 000570

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EINV BEXP ELTN ETRD AG
SUBJECT: BECHTEL POISED TO PREVAIL IN BID PROCESS FOR
CONSTRUCTING AT LEAST ONE SEGMENT OF THE EAST-WEST HIGHWAY

REF: ALGIERS 168


1. (U) This cable contains proprietary information. Please
protect accordingly.

BIDS UNSEALED IN FULLY TRANSPARENT PROCESS
--------------


2. (U) In full view of the Algerian media, public and
diplomats representing the home countries of firms bidding to
build segments of the 7-billion dollar East-West Highway, the
committee evaluating the bids of the competing foreign firms
reviewed the submitted bid materials March 28. In a clear
show of transparency, the committee methodically opened the
boxes of materials submitted by each bidding firm and
verified that all required elements of the bid were present.
A member of the committee's staff then noted the presence or
absence of the necessary documentation on a board at the
front of the room. For each of the three segments of the
highway let for bids -- east, west, and center -- the members
of the committee listed separately on the board the amount of
bond guarantee and the price bid by each firm, according to
the submitted documentation.

BECHTEL WELL POSITIONED TO WIN AT LEAST ONE SEGMENT
-------------- --------------


3. (U) At the end of the meeting, which lasted far longer
than scheduled, the U.S. firm Bechtel, the only bidder
representing a single firm rather than a consortium, came in
as the second-lowest bidder on both the eastern and western
segments (behind a Chinese firm). The Chinese were also the
lowest bidders on the center segment, on which Bechtel did
not bid. The committee announced at the end of the public
session that it would review over the next two weeks the
details of all qualified bids, which were not structured
uniformly and thus not suited to on-the-spot comparisons.
The Algerian press reported March 29 that a winner for each
segment was expected to be announced April 15.


4. (SBU) It was widely expected that a Chinese firm would
prevail as the lowest price bidder on all three segments.
Once quality and performance factors are taken into account
by the evaluation committee -- worth 60% of the weighted
final point total -- Bechtel, which is widely regarded by
foreign embassies and competing firms as the leading entity
on quality factors, would be well positioned to win the
contract to construct either the western or eastern segment.
(Note: Bechtel, its competitors, and diplomats expect the
Algerians to award each of the three segments to a different
firm.)


5. (SBU) Before the March 28 event, Bechtel believed it had
its best chance of prevailing on the western segment. Based
on its better than expected finish on the pricing side of the
eastern segment, however, Bechtel's chances of winning that
segment -- whose construction costs are more expensive than
the western segment -- are now considerably improved. At a
point during the March 28 event, when it appeared that the
Japanese firm came in as the second-lowest bidder on the
eastern segment, the Japanese DCM, who is well-versed on the
bidding process, acknowledged to PolEc Chief that Bechtel was
well-positioned to win the eastern segment based on the known
price aspects of the accepted bids and Bechtel's presumed
advantage on quality and performance factors.

EMBASSY'S ADVOCACY HELPFUL
--------------


6. (SBU) While it is too early to open a bottle of
champagne, Bechtel representatives were pleased and
optimistic at this stage of the bidding process and thanked
the Embassy for its strong advocacy. Bechtel acknowledged
that Ambassador, at very senior levels, and
economic/commercial staff worked successfully to educate the
GOA on the importance of avoiding a bid evaluation process
entailing lowest price automaticity. As a result, factors of
quality and proven performance were given more weight, thus
creating a more favorable playing field for Bechtel. In
addition, at a very early stage in the process, Ambassador,
working closely with Bechtel, convinced the government of the
advantages of a sovereign-financing rather than a
build-operate-transfer approach, a decision that facilitated
dividing the project into three sections and increased
Bechtel's chance of being awarded one of them.

ERDMAN