‘Contract bundling can be useful’ – Exxon Head defends criticised practice

Local private sector players have registered their criticisms of contract bundling practices within Guyana’s oil and gas sector but President of ExxonMobil Guyana Alistair Routledge believes it can actually be useful.

“Yes, some people have criticised (contract) bundling but it actually serves a very useful function in cascading opportunities through the supply chain,” Routledge said during an interview with the News Room on Friday.

Contract bundling is a process of consolidating goods and services required into one, much larger contract as opposed to requesting those goods and services from various players under separate, smaller contracts.

The Georgetown Chamber of Commerce and Industry (GCCI) has repeatedly criticised this practice, lamenting that it can lock out local participation in the oil and gas sector.

“Contracts are being solicited for expression of interest (EOI) and requests for information (RFI) under one umbrella by various players in the industry.

“The sum-effect of this practice is that micro, small and medium-sized enterprises (MSMEs) are unable to compete in the space since the ‘bundling’ practice will set an artificial barrier to their participation,” a recent release from the Chamber stated.

But Routledge does not agree with this position.

He explained that ExxonMobil Guyana is an oil and gas operator that is not versed in office management, for example. Because the company would be interested in office management services, it would seek a company that would supply all of the necessary services.

“The benefit of us passing that managed service, if you like, to another company is that they will find those services with local companies as well,” the company head posited.

As such, he posited that more local companies will be able to benefit since the company awarded the general contract could seek the services from other companies.

The GCCI has called on Guyana’s Local Content Secretariat to examine the practice and its harmful effect on local content and private sector development in Guyana, moreso since it appears to be contrary to the Local Content law.