OREANDA-NEWS. October 04, 2010. TNK-BP held the first supplier and contractor convention in its history, and probably the first in the history of big business in Russia. The convention was necessary to inform our contractors about the new working practices and to hear our partners’ concerns. TNK-BP’s Executive Vice President Anatoly Tyomkin told KP’s correspondent why it is important to give each contractor and supplier the opportunity to communicate directly with company management, reported the press-centre of TNK-BP.

— Anatoly Arkadyevich, becoming a contractor to a giant like TNK-BP is probably every businessman’s dream, especially out in the regions. How many contractors do you have?
— Our approach is extremely simple: every job should be performed by professionals. We produce and refine oil in a professional way. But there are areas where our partners are more professional than we are. And this is why we seek to outsource as many functions as possible to our contractors — both core functions relating to operational processes like servicing equipment, and noncore functions such as transport, staff catering and office services. We also work with small and medium-sized businesses, so of course we’ve got lots of partners. TNK-BP is the third largest oil and gas company in Russia; every year we procure goods and services worth over 180 billion rubles, approximately 90% of purchases are made inside Russia.

— Anatoly Arkadyevich, could you explain what one needs to become a supplier of products or services to your company? Surely the market’s all sewn up and there’s no way an outsider can get through to you?
— We are proud of the fact that any contractor or partner can come in literally off the street. We think it is natural that there should be healthy competition amongst our suppliers and contractors, and that even people we trust and have worked with for a long time should continuously improve their work and offer us better quality and prices.

— What do you mean by “come in off the street”?
— It means reading on the company website one of our tender announcements that are published literally every day and submitting a bid. It will definitely be reviewed.

— So you’re saying that anybody can take part in a tender, which means that the opportunities for manipulation must be unlimited? These days you can buy a fly-by-night company outside a metro station in five minutes…you become a general director and start negotiating your supply terms and “developing” competition.
— No chance. TNK-BP has developed a system that prevents shady companies from becoming contractors. Any company that wants to do business with us has to pass a preliminary check. And there are no exceptions to this rule. If you pass, then you’re welcome to submit your tender application.

— What are the criteria that determine the tender winner? Is it the price?
— Yes, mainly price, but also quality. It always turns out more expensive to re-do something, to change it, finish it off or repair it than to do it properly the first time round. How do we decide who will do the best job? It’s all a question of common sense: we look at the experience of a company and its staff, at its previous projects and talk to other clients they’ve worked for.

— But still, price is the main thing?
— As far as the price is concerned, it has to be justified, or fair, if you like. The main thing for us is that our contractors and partners are absolutely transparent and honest both in respect of TNK-BP and in respect of the law. There’s nothing particularly complicated about it: we simply demand that our contractors and suppliers follow the same rules that TNK-BP follows. These concern occupational health and legal compliance – including tax – and business standards. Or to put it plainly, we only work with legit companies. And in that sense it’s not easy working with us.

— Your interest in working with such companies is clear, but what interest do the companies have in being legit?
— Contractors who perform well and are intolerant of fraud and corruption can, over time, acquire the status of “Permanent Partner”, which gives them particular benefits and bonuses. And most importantly, it’s a sort of a “quality badge” for the longer term. A good reputation is worth a lot, and businessmen understand this better than anyone else. And then, we ourselves invest in our partners in areas like the best safety standards, training and access to modern global technology.

— How many partners does TNK-BP have at the moment?
— We’ve just held a contractor and supplier convention that attracted over 300 participants from all over the country. These people represent companies working literally in every field, from the development of unique geological exploration equipment to catering. Let me emphasize in particular that they didn’t just come to hear about our policies, but primarily to tell us about their problems. The thing is, we want our contractors to feel comfortable working with us.

— And if a contractor is a victim of unfair competition does he have to wait for the next convention and go all the way to Moscow for justice?
— There’s no such thing as ideal business conditions, especially in this country. But it’s in our own interests to maintain constant contact and direct dialogue with our partners. That’s why we’re setting up dedicated regional coordination councils to help contactors understand our contracting principles and practices. If we see from the contractors’ complaints that the mechanism isn’t working properly or is ineffective, or that one of our managers is being too picky, we can always put things right.

— So it’s not easy working with you.
— No, but it’s worth the effort!