Bulk Procurement System (BPS) is the system established pursuant to Petroleum Act and The Petroleum(Bulk Procurement System) Regulations, 2017 to govern the importation of petroleum product into Tanzania.

PETROLEUM PRODUCTS IMPORTED UNDER BPS

The BPS shall apply to the following petroleum products:

1. Motor Super Premium (PMS); (identified as clean petroleum product in BPS)
2. Automotive Gasoil (AGO); (identified as clean petroleum product in BPS)
3. Illuminating Kerosene (IK); (identified as clean petroleum product in BPS)
4. Jet-A1 (identified as clean petroleum product in BPS)
5. Heavy Fuel Oil (HFO);
6. Liquefied Petroleum Gas (LPG); and
7. Any other petroleum product as the Minister may declare.

BPS FRAMEWORK

PARTICIPANTS IN BULK PROCUREMENT OF PETROLEUM PRODUCTS

Implementation of bulk procurement of petroleum products involves the key player, comprising of suppliers, OMCs (Oil Marketing Companies), Marine Surveyors and Terminal Owners.

Suppliers of Petroleum products

In BPS, Suppliers of petroleum products are obtained from international competitive bidding process with tenders being floated to prequalified suppliers only, participation in tenders is not open to the general public. Suppliers are both international and local entities which participate in tenders for the supply of petroleum products.

Prequalification of Suppliers under BPS

1. Expression of interest shall be advertised and companies meeting the requirements shall be pre-qualified and be invited to bid to supply volumes tendered for.
2. Invitation for pre-qualification will be published through:
• Local and International newspapers;
• Emails to past years prequalified suppliers;
• Emails to OMCs;
• Emails to International forums and institutions dealing with petroleum business;
• Emails to individual companies which showed interest to participate in BPS tenders; and
• PBPA Website.

Pre-Qualification Criteria

The following are criteria for bidding entity:

1. Must be a registered legal entity structured for the petroleum supply and trading business, proof of which will be sought from a certified copies of the company’s certificate of registration, memorandum/articles of association, tax payer’s registration certificates and business license;
2. Multinational companies must have a gross trading turnover of at least USD 100,000,000 per year and for local companies must have capitalization or asset base at least thirty billion (30,000,000,000) Tanzania Shillings, both shall be evidenced by a certified Audited Financial Statements for the past three consecutive years;
3. Must submit company profile containing, among other information;
4. For international companies must have a minimum of three (3) years’ experience in international trading of petroleum products; and for local companies, must have a minimum of five (5) years’ experience in local marketing business of petroleum products. The above required experience must be proved by any of two items listed below;
   • Letters from customers or suppliers/refineries indicating annual volumes handled;
   • Certified copies of Bill of Lading;
   • Certified copies of contract.
5. The applicant must submit a commitment letter to:
   
   • Provide credit terms of not less than 60 calendar days from the first day of delivery date range;
   • Undertake to comply with TBS standards in regards to the specifications of the products;
   • Undertake to deliver the cargos in vessels that have been approved by TPA; and
   • Perform the contract in line with the terms and conditions stipulated in the Shipping and Supply contract and the governing laws of United Republic of Tanzania.
6. The applicant must submit a warrant that there is no actual or threatened litigation that my affect its liability to comply with the performance of the contract under the Bulk Procurement System;
7. The applicant must submit assurance to prove that the company is not insolvent, declared bankrupt by a competent court or be the subject of any winding up process;
8. The applicant must submit valid tax clearance certificate issued by competent authority or as the case shall be a letter from competent Authority that the company has been exempted from paying tax or is operating in a tax free zone.
9. The applicant must submit a statement explaining the modality of handling the responsibilities under the shipping and supply contract i.e. office where all operations will be performed. If some of the company obligations will be performed by an office or Affiliate company, the applicant must provide the nature of activities which will be performed by those offices.
10. Companies wishing to form a joint venture are required to submit a registered joint venture agreement. The joint venture agreement must be registered in Tanzania. Among other things the joint venture agreement should state:
    
    • Management of the joint venture operations;
    • Rights and responsibilities of parties to the joint venture agreement;
    • Profit and loss sharing; and
    • Technical support to the joint venture.
11. The applicant must provide source of financing of the obligation under the shipping and supply contract in the event they win the contracts;
12. Past performance of the contracts with the Agency shall form the basis for pre-qualification of the suppliers. Records of the previous contract performance shall be obtained from:
    • The Agency records on the suppliers’ performance in the previous tenders;
    • Minutes of the stakeholders’ meetings; and
    • Correspondence from other parties in relation to the supplier’s performance of the contract.
13. For local OMC applying for pre-qualification they must not have defaulted to make payment as buyers of refined petroleum products for twelve (12) consecutive month prior to invitation for pre-qualification.