Standard Procurement Procedure
Outline of Procedures (materials & equipment)
New VE Formulas
Outline of Procedures (construction works)
New VE Formulas
At-Estimating VE Formula
- This procedure, when receiving estimates, calls for the submission of VE proposals, in addition to ordinary estimates, from prospective suppliers and offers a reward according to the amount of cost that can be reduced by the accepted proposal.
- TEPCO does not pay the cost involved in the preparation of documents necessary for VE proposals.
- The VE proposal at time of estimates submission procedure is performed by the following flow:
Model Flow
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Process up to request for estimates by the regular purchasing procedure |
Submission of written alternative plan or proposal |
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Receipt of alternative plan or proposal |
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Decision on most successful bidder |
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The rest by the regular purchasing procedure |
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If the alternative proposal by the most successful bidder is accepted |
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Reward according to amount of cost reduced |
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Explanation of Flow
Submission of Alternative Plan and Written Proposal
In estimating the cost of the planned purchase, please submit alternative estimates and written VE proposal as well as ordinary estimates to the Materials & Procurement Department of TEPCO.
Technical Inspection
After comprehensively inspecting the proposals submitted in terms of technology, safety, cost, etc. to find if their contents meet our quality, function and performance requirements, we decide whether or not to accept the proposals.
Decision on Most Prospective Bidder
The supplier who has submitted the lowest estimate (if his or her alternative proposal is accepted, the lowest alternative estimate) is considered the most prospective bidder.
Reward According to Amount of Cost Reduced
TEPCO issues a designated or otherwise preferential order to the successful supplier according to the degree of contribution by the proposal, particularly the amount of cost that can be reduced by it.