JULY 2009 | LEGAL REPORT #7
THE COLOMBIAN SATELLITE BIDDING PROCESS HAS BEGUN

After a bidding process which Satel Counsel International, Sti Ltda and Incorbank S.A. won to advise the Ministry of Technologies, Information and Communications and preparing the bidding terms for the “Design, development, manufacture, delivery, launching and operation of the Colombian social communications Satellite System (CSCSS) during its risk period”, the drafts of these bidding terms have been published in the official Contracting website since the 26th of August in order to be commented (they are available for any comments or suggestions until 3:00 p.m. of the 9th of September).

• The main points of this document are:

• The Public bidding process main objective is the selection of the Contractor for the design, development, manufacture, delivery, launching and operation of the Colombian Fixed Services or Broadcasting Satellite (FSS or BSS) during its risk period and in accordance to these bidding terms.

• The bidding process is open to space industry manufacturers or to satellite fixed services operators FSS which prove experience as “prime contractor” for fixed services or broadcasting satellite manufacturing agreements and locating satellites into Geostationary Orbit GEO. Prime Contractor means the main Contractor who has under its direction and responsibility the execution of an agreement in which services and activities of subcontracted third parties will be integrated. The required elements of a prime contractor are complied with because at least, a satellite operator, a satellite manufacturer and a satellite launcher will be required, in which case either the satellite operator or the satellite manufacturer would act as prime contractor and the others most surely as contractors, unless they choose to participate as a Consortium or as a Temporal Joint Venture. Prime contractor means that the contract with its client has been in a ready to use modality for the delivery of the satellite in orbit (In Orbit Delivery, IOD) this modality includes its direct responsibility regarding:

1. Manufacturing the satellite and its delivery in ground (In Ground Delivery, IGD).

2. Launching, delivery in orbit (IOD) and operation during the risk period.

3. Insurance that covers launching campaign, enlistment, launching and first year of operation in orbit.

4. Ground Control Stations (TTyC, control mission, control payload).

5. Training and Technology Transference.

6. Access to the minimum Orbit Spectrum Resource necessary.

MAXIMUM BUDGET

The official budget of the Information Technologies and Communications Fund for this Project corresponds to USD$249.041.095,89, budget approved by CONPES no. 3579 of the 25 of March of 2009 .

• The selection mode, through which the contractor selection is going to be performed, corresponds to Public Bidding.

• Considering the essence, nature and characteristics of the contract to be executed with the Information Technologies and Communications Fund, its form will be “ready to use” or “turnkey contract”) according to the doctrine definitions.

• QUALIFICATION REQUIREMENTS TO PARTICIPATE IN THE SELECTION PROCESS

• Legal conditions. In the current process the participation of the following is allowed:

a. National and foreign Corporations which had filed their individual proposals and which their corporate purpose includes: (i) space systems production and/or (ii) artificial satellite operation for fix or broadcasting services.

b. National and foreign corporations which file proposals and are constituted as consortiums or as Temporary Union, and which the corporate purpose of at least one of the members includes (i) space systems production and/or (ii) artificial satellite operation for fix or broadcasting services. The others members of the consortium or the Temporary Union should have within their corporate purpose some of the next activities: manufacturing of space qualified components, satellite integration and assembly, tests and trials of space systems and/or components, launching of satellite systems, securing of space missions, broadband services assistance and production of VSAT networks.

When the proposal is filed as a consortium or a Temporary Union the member which certified the experience as a manufacturer or as an operator must have a participation of at least 66% both in the proposal and its execution.

The foreign corporations must prove to have a representative who is domiciled in Colombia and is duly authorized to represent them during the Public Bidding and specifically to file the Proposal, give participation and compromise to their represented at all moments of the Public Bidding proceeding, sign the request documents and declarations and also sign the Agreement. If they are adjudicated, they are obligated to constitute a branch office or have a representative who is domiciled in Colombia .

No corporation can participate in more than one proposal either as an Individual Bidder or as a member of a Consortium or a Temporary Union. Notwithstanding the aforementioned, in case an Individual Bidder, a Consortium or a Temporal Joint Venture files in their Offer, subcontractor proposals for any activity of the Agreement, those subcontractors can participate in other Offers which arise in this Public Bidding proceeding.

If your company is interested in the aforementioned bidding process, please contact Dr. Alejandro Delgado Moreno.