Consequences of not delivering the offset projects
There are major penalties imposed on a supplier who cannot fulfil this part of the contract:
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Loss of credibility as a valued supplier |
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Potential loss of further business |
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Major financial penalties are imposed which just increases the burden and potentially creates financial loss on the contract |
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Buyer country may refuse acceptance of equipment being supplied under the main contract in a phased delivery programme |
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Reduces the “bid to win” ratio |
The buyer country also suffers from non-delivery of offsets:
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Potential impact on its national economy |
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No positive commercial impact on local businesses |
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Loss of credibility in future procurement where offsets may be required |
What this means is that if supplier companies want to be able to bid for these high value contracts, they need to be able to both offer and fulfil offset obligations. One option open to them is to outsource this to Tricolom.