Consequences of not delivering the offset projects

There are major penalties imposed on a supplier who cannot fulfil this part of the contract:

Loss of credibility as a valued supplier

Potential loss of further business

Major financial penalties are imposed which just increases the burden and potentially creates financial loss on the contract

Buyer country may refuse acceptance of equipment being supplied under the main contract in a phased delivery programme

Reduces the “bid to win” ratio

The buyer country also suffers from non-delivery of offsets:

Potential impact on its national economy

No positive commercial impact on local businesses

Loss of credibility in future procurement where offsets may be required

What this means is that if supplier companies want to be able to bid for these high value contracts, they need to be able to both offer and fulfil offset obligations. One option open to them is to outsource this to Tricolom.