One of the basic principles set out in the Rio Tinto procurement principles is to secure the best quality/price ratio for Rio Tinto.
Tenders and proposals are collected through a competitive procedure. Three bid solicitation methods are generally used to meet procurement requirements. These three contain all the information needed to submit an appropriate offer:
1. Request for quotation by email (RFQ via the SAP platform): suppliers are invited to submit prices and deadlines; the lowest- priced, technically- compliant offer is usually successful.
2. Request for proposal opened through the media or by post: a formal invitation to submit a proposal for a contract with a value greater than $75,000.
3. Call for tender: a formal invitation to submit an offer for a contract generally subject to specific conditions, of a value greater than $75,000. When tenders have equal technical, HSE health, safety and environment, and quality merits, the contract is awarded to the lowest-priced offer.
Contracts are awarded on the basis of the best quality/cost/deadline ratio, with consideration for technical, security and environmental specifications, the delivery schedule, after-sales service, and the availability of spare parts.