Construction contracts are normally awarded to a qualified bidder who is having:
– Appropriate capabilities; and
– Other resources.
This can be achieved in two ways:
a) To verify whether the selected bidder possesses the required qualifications and experience before the contract award (post qualification);
b) To ensure that bids are submitted only by firms that have the necessary qualifications and experience (pre-qualification).
Hence Purpose of Pre-qualification is:
To ensure that bids are submitted only by firms, or a group of firms possess the necessary qualification in terms of:
a) Experience and past performance,
b) Financial capacity; and
c) Technical capability concerning personnel, equipment, and plant.
Prequalification is generally used for;
Large or complex civil works;
Design and Build or Turnkey contracts;
Supply and installation of expensive or technically complex industrial plant/equipment.
Advantages of pre-qualification:
For insufficiently qualified bidders;
- Avoid the expense of bidding;
- Encourage to form joint ventures.
- Protect from unqualified bidders;
- Indicate the number of firms interested in bidding;
- Reduces the amount of work/time involved in evaluating bids from unqualified bidders;
- Assess the eligibility for domestic preference.
For qualified bidders;
- Encourages reputable contractors to bid;
- Encourage them to price their bids with the awareness that they are competing against other qualified bidders;
- Assures the bid will not be rejected on qualification grounds.
Disadvantages of pre-qualification:
- Increase procurement lead time;
- The client is required to review all prequalification applications;
- Collusion is easier among a limited number of bidders.
- Issue of Pre-qualification Questionnaire;
- Receipt of pre-qualification applications;
- Evaluation of applications;
- Inviting all firms found capable of performing the contract to submit bids.
Evaluation of prequalification applications:
- Criteria comprise establishing whether the applicant has adequate:
- Financial capacity;
- Technical capacity;
- Relevant experience.
Methods of Evaluation
Two methods are widely practiced:
a) Scoring system:
b) Pass/fail criteria.
Establishment of groups and assignment of the minimum score;
- Assignment of sub-criteria to each group.
- Usually 3 groups;
- Financial capability;
- Technical qualifications (management, staff, and equipment);
- Experience (including past performance).
Pre-qualification will be based on applicants meeting all the minimum pass-fail criteria of the predefined factors given in the prequalification document.
- General construction experience;
- Financial position;
- Personnel and equipment capabilities.
The pre-qualification document generally consists of:
a) Invitation for pre-qualification;
b) Instructions to applicants;
c) Letter of application; and
d) Standard forms to submit information.