The US upstream industry has consistently demonstrated excellence in technical innovation. From the shale revolution in the Permian Basin to deepwater breakthroughs in the Gulf of Mexico, operators have proven their ability to push engineering frontiers. But today, one of the biggest challenges is no longer below ground—it’s in how projects are evaluated and awarded.
Tenders for drilling, completion, and development contracts have become increasingly complex. They must balance cost efficiency, ESG requirements, digital innovation, and stakeholder expectations. Yet too often, technical assessments and commercial decisions are treated as separate tracks. This fragmentation creates inefficiencies, delays, and missed opportunities for long-term value.
To remain competitive, US operators must innovate not only in technology, but in how they design and manage tenders. This article introduces a tender strategy framework—a four-pillar model built on nearly 2 decades of international upstream experience—that integrates engineering rigor with business strategy to improve contract awards, strengthen transparency, and deliver lasting project performance.
The Tendering Challenge in US Upstream
Tendering is no longer a routine procurement exercise—it has become a strategic function. Operators today must navigate
- Rising technical complexity, from ultradeepwater wells to advanced shale completions.
- Intense cost pressures, where even small percentage gains translate into millions in savings.
- ESG expectations, embedding sustainability and transparency in contract decisions.
- Digital transformation, where data-driven tools are reshaping evaluations.
Traditional siloed approaches, where engineers run models and procurement later negotiates price, miss critical interdependencies. The result is conservative awards focused narrowly on cost, overlooking innovation, performance, and long-term value.
The Tender Strategy Framework
The framework integrates technical and commercial decision-making into a single structured process. Its four pillars are
1. Integration of technical and commercial inputs. Engineering, procurement, and financial teams collaborate from the outset, aligning assumptions and defining success metrics together.
2. Risk mapping and scenario planning. Probabilistic scenarios replace purely deterministic models, assessing potential cost, schedule, and operational risks under multiple market conditions.
3. Value vs. cost matrix. A decision matrix evaluates not just price, but also technology value, ESG alignment, contractor capabilities, and local content.
4. Data-driven decision support. Advanced analytics consolidate data across wells, projects, and vendors, generating insights that extend beyond simple cost comparisons.
This integrated approach ensures tenders are designed to select contractors that deliver both competitive bids and sustainable performance.
The four pillars of the proposed framework: (1) integration of technical and commercial inputs, (2) risk mapping and scenario planning, (3) value vs. cost matrix for operators, and (4) data-driven decision support. Together, these elements enable operators to design and manage tenders that deliver both cost efficiency and long-term performance.
Applied Example: From Fragmentation to Alignment
In a recent international project, fragmented decision-making led to a contract award delayed by weeks and projected costs escalating more than 12%. When the tender strategy framework was applied in a subsequent phase, the results were measurable.
- 10% cost savings from earlier identification of vendor risks.
- Faster cycle time, with evaluation completed 3 weeks sooner.
- Improved transparency, aligning engineering, commercial, and executive stakeholders on shared criteria.
Though this case occurred outside the US, its lessons are directly relevant. Whether in unconventional plays in Texas or high-stakes offshore projects, integrated tendering can improve both efficiency and outcomes.
Strategic Benefits for US Operators
Implementing this framework offers tangible advantages.
- Value-driven awards, balancing cost with innovation and ESG commitments.
- Stronger operator–contractor alignment, creating partnerships focused on performance, not just price.
- Operational efficiency, reducing duplication and shortening decision cycles.
- Resilience under market volatility, with scenario planning and risk-based foresight.
By elevating tendering from a transactional process to a strategic discipline, operators can ensure US upstream remains competitive in a global market where both economics and expectations are rapidly shifting.
The Competitive Edge Ahead
The future of US upstream competitiveness will be shaped not only by technology in the field, but by how operators structure and evaluate the tenders that define multimillion-dollar projects. As procurement grows more complex, innovation in decision-making is becoming just as critical as technical breakthroughs.
Operators that bridge engineering and business can design and manage tenders that go beyond cost alone—embedding transparency, performance, and long-term value into every award. By redefining tendering as a strategic function, operators position themselves to raise industry standards and strengthen competitiveness across the entire upstream sector.
