Journey 1995:Non-Stop

Chapter 372 Government Tendering
The hottest thing this year has to be the Olympic mascots, the Fuwa. This was one of the first IP products Yan Hui came into contact with, and he even bought a set and gave it to Qinglan.

When Yan Hui was asking someone to help him buy Fuwa dolls, someone else approached him, asking if he wanted to produce Fuwa dolls together, saying that the profit margin was very high and the cost was only a few yuan. Yan Hui was initially quite interested, but after investigating a little more, he realized that the person who contacted him had no authorization and was a pure pirate.

If Yan Hui were just a steel business owner, he might not have this awareness, but he has been working with patents for several years, so he refused without even thinking about it.

Later, Yan Hui asked around about the channels for officially licensed production of Fuwa mascots, but after asking several people, he still couldn't find an answer and had to give up.

At the end of February, while Yan Hui was reading a novel, he saw information about a public tender on the government's website.

Project Name: Steel Procurement Project for the Jinan City Sports Center Stadium Construction Project
Project Number
Purchasing unit
Project Budget
Procurement Scope: 4.3 tons of construction steel (specific specifications, models, and quality requirements are detailed in the tender documents)
Delivery Location: Construction site of the Jinan City Sports Center Sports Venue Project
Delivery period: Delivery shall be completed in batches within 180 days after the contract is signed.

Supplier qualification requirements: Must be an independent legal entity and hold a valid business license.
Possess qualifications for steel production or sales and relevant product certifications.
There have been no major illegal business operations or major contract disputes in the past three years.
Procurement methods
Yan Hui carefully read through the relevant information and found that his company was fully qualified.

Generally speaking, only first-tier agents can participate in this type of project because it requires authorization documents from the steel mill, which second-tier agents cannot obtain. Government procurement is very strict, and without a first-tier agent, it is impossible to enter the preliminary selection.

In other words, no more than 10 companies are eligible to participate in the bidding.

Perhaps knowing that this order required a large amount of steel, the government's formula stated that a maximum of three companies were allowed to bid, and each company could specify its own supply volume.

For example, if you think you can't supply more than 40,000 tons in six months, you can apply for a bid for only 15,000 tons.

The target is 43000 tons within 180 days, which translates to approximately 7200 tons per month, requiring around 2700 million yuan in funding per month. The biggest problem now is that the tender document does not clearly specify the payment cycle.

If payment is only received after 180 days of full supply, then 1.6 million yuan will be tied up. Currently, no primary distributor in the entire city of Jinan can come up with that much cash.

Therefore, although the tender documents contained a lot of information, they still lacked essential details that Yan Hui needed to know. Generally, the payment cycle is one month, but why wasn't that stated?

None of them wrote it?

Yan Hui lacked experience in participating in government bidding projects, but it wasn't convenient for him to ask others for advice.

Yan Hui definitely couldn't ask about the other first-level agents, and as for Li Shengli from Linzi, he wouldn't really trust him either. After all, Li Shengli had been in this industry for so many years and must know a lot of agents in Quancheng. Yan Hui couldn't guarantee that Li Shengli would really keep his secret.

However, compared to other bosses, Yan Hui is more adept at "using computers".

In the past two years, Yan Hui has frequently turned on his computer and logged into websites to read novels, so while I can't say for sure about other things, he is quite proficient in web browsing, at least more so than other first-level agents.

He began searching through other files and materials on the website, patiently going through them one by one.

After searching for about 20 minutes, Yan Hui found the supplementary document (modification and supplement to the tender document) for this project. This notice was a supplementary notice for the entire sports stadium construction project, not just for steel. Here, Yan Hui saw the following sentence: "Monthly progress payments will be made, with final settlement to be processed upon completion and acceptance of individual projects." Specifically, the settlement period for material payments is 10 working days after the materials have been inspected and accepted.

what?
Yan Hui kept reading this sentence over and over, and he was suddenly jolted.

The settlement period for materials is only half a month!
what does this mean?
Originally, within 180 days, including some intermediate time, if payment was made monthly, goods could be supplied about 6 times. Now, goods can be supplied 12 times!
This means that the cost of a single transaction is only around 1400 million, which allows for a more suitable price to be offered!

Laymen might not understand the difference between a half-month cycle and a one-month cycle, but Yan Hui is very familiar with it.

If the price of steel is 100 yuan, and Yan Hui wants to earn 3 yuan a month, then under normal circumstances, Yan Hui needs to quote 103 yuan and settle accounts monthly to ensure a 3% monthly profit.

However, if the settlement is made every two weeks, Yan Hui only needs to put up 50 yuan to complete the transaction. Moreover, he can compress the profit per transaction to 1.5%, earning only 0.75 yuan each time. After two transactions, he can still earn 1.5 yuan, which is also a monthly profit of 3%.

To achieve the same 3% monthly profit, Yan Hui only needs to allocate half of the funds for working capital, and the rest can be used for other purposes.

From the perspective of the bidding party, this is actually an extremely smart choice, demonstrating that there are intelligent people among them.

With such a short payment cycle, it's certain that lower-priced steel can be obtained. If the supplier compresses its profit to 1.5%, the bidding party can save 1.5% of its funds. Overall, the bidding party will save approximately 200 million yuan.

Of course, this is a rough estimate; the actual figure depends on the price negotiation between the bidders and the tendering party.

This unconventional bidding method indicates that the bidding party has plenty of money in its accounts, and it's specifically earmarked for this purpose. Such funds earn almost no interest, so rather than letting them sit idle, it's better to settle accounts quickly, thus securing lower-priced steel.

This addendum concerns the entire project, while the steel tender came after the project's general tender. In government documents, if the settlement period has been mentioned in earlier documents, it's generally not necessary to repeat it later.

Yan Hui didn't know how many people had noticed this, but he knew his opportunity had arrived.

For projects where funds are earmarked for specific purposes by higher authorities, it's extremely difficult to pull strings. The fairest approach is to review the tender documents. These documents are permanently archived.

Therefore, after reviewing the relevant documents again, Yan Hui immediately began calculating costs and started writing the tender document.

If Yan Hui can secure this project, it will greatly benefit his agency career. With the backing of a national-level project, he will have a competitive edge when participating in any government tenders in the future, and will be more likely to be accepted.

With this in mind, Yan Hui went to see General Manager Yuan of Laiwu Steel to discuss the price of steel so that he would have a better understanding of the situation.

There had been prior communication that if the monthly steel sales reached 10,000 tons, the price per ton could be reduced by 20 yuan. This might not seem like much, but Yan Hui really wanted to achieve it; it was also a symbol of status and prestige. People tend to like round numbers; it's a human emotional trait.

(End of this chapter)