PREQUALIFICATION OF TENDERERS (ref link: prequalification-of-tenderers )

Tendering can be very expensive, so as the Client there is a need for conducting a formal pre-
qualification / pre-selection process for selecting from a pool of bidders (contractors, suppliers,
vendors, and consultants) to save time and project costs by quickly removing inexperienced or
incapable tenderers and bidders, allowing only those capable and having the competence to provide
a proposal.

Why Conduct a Pre-qualification / Pre-selection Process?

1. Tender Cost Saving.
 Each tenderer included on the tendering list will need to be managed, evaluated,
interviewed, questions responded to, and post-qualified. This, for each individual
company, takes considerable time, effort, and resources. The process helps manage
these costs by removing companies that will not eventually meet the overall project
requirements and expectations early in the process.

2. Tender Programme Savings.

 Like the tender cost savings, managing the tendering process can take considerable
time, resulting in extended programming times at the initial stages of the project.
The time spent on the overall tendering process can be reduced if companies are
removed from the process, which will not meet the overall requirements.

3. Ensure the Contractor, Vendor or Consultant is a Responsible Business.

 The aim is to avoid fly-by-night companies, preferring to employ reputable
companies to carry out the work. Understanding a company’s reputation, speaking
to others who have dealt with them, and requesting references would aid this.

4. Ensure the Company has the required Financial Resources.

 a business’s financial accounts and creditworthiness would be evaluated to ensure
they have sufficient resources and existing cash flow to purchase services and
products in the initial stages and then see the project through to completion.

5. The Company holds the required Licences.

6. The Company has No Outstanding Legal Issues.
7. Acceptance of Clients’ Terms and Conditions
8. There are no Conflicts of Interest
9. The Company has a Compliance Programme in place
 Due to the nature of work, there are a few items that will need to be understood
and considered when employing anyone on a project, especially one of size:
Managing bribery and corruption, Due diligence reviews of potential suppliers,
vendors, and contractors employed by the general/main contractor. Each tenderer
should have a clear compliance program/document in place to manage both of
these aspects.
10. The Company has a good Health & Safety Record.
11. Confident that the Company has Completed Similar Projects.
12. Expected Programme & Milestones are Achievable
 13. The Company has the Required Resources
14. Resources have the correct Qualifications and Skillset
15. The Company has the correct Equipment, Tools, and Software to complete the work.

Who is Responsible for Conducting the Process?

The process will be overseen and managed by the Client’s Procurement/Bid Team where the Project
Manager can take the lead.

Steps for a Pre-qualification / Pre-selection Process

Step 1 – Understand the Scope/Delivery Required

Before the prequalification process, the bid team should review the project/works package to
understand the scope and delivery needed from the bidders.

Step 2 – Bidder/Tenderer List

Once the overall works package is understood, the client bid team will put together a list of potential
bidders who, in their view, should be able to complete the works.

Step 3 – Create a Prequalification Document

The Client bid team/representative will create a prequalification document template that is
intended to be issued to the tenderers on the list in Step 2 after approval by the Client.

Step 4 – Issue Prequalification Document to Listed Tenderers

Once all are agreed, the client bid team will issue the prequalification document to the
tenderer/bidders for their completion and return.

Step 5 – Review of Responses

The client bid team will review all responses from the tenderers to evaluate their suitability to
provide an overall cost on the project.

Step 6 – Recommendation to Client

Once the evaluation process has been completed, the bid team will provide their results and advise
the Client on which tenderer should proceed and which should be removed from the process.

Step 7 – Update Tender/Bidder List

Once agreed with the Client, the Tenderer List will be updated, removing the companies that did not
meet the prequalification requirements.

Step 8 – Notify Listed Tenderers

The bidding manager will notify each company individually, confirming if they have been selected to
provide a proposal or if they were unsuccessful.

Step 9 – Issue Tender Documentation

Once all tender documentation is ready and consolidated, the bidding manager will issue it to the
successful prequalification tenderers.

Sample Prequalification Document Template

[ Company Name/Logo]
Prequalification Document
Project Name: [Enter Project Name]
Date: [Enter Date]
Section 1: Introduction
1.1 Project Overview:
Brief description of the project/works package.
1.2 Purpose of Prequalification:
Explanation of the purpose of the prequalification process.
1.3 Instructions to Tenderers:
Clear instructions on completing and submitting the prequalification document.
Section 2: Tenderer Information
2.1 Company Name:
Full legal name of the tendering company.
2.2 Address:
Physical address of the company.
2.3 Contact Information:
Name, phone number, and email address of the primary contact person.
Section 3: Company Background
3.1 Year of Establishment:
Year the company was founded.
3.2 Ownership Structure:
Details about the ownership structure (public, private, partnership, etc.).
3.3 Key Personnel:
List of key personnel with relevant experience.
Section 4: Financial Information
4.1 Financial Statements:
Submission requirements for audited financial statements for the past [X] years.
4.2 Financial Stability:
Description of the company's financial stability and ability to meet project costs.
Section 5: Experience and Capabilities
5.1 Relevant Projects:
List and describe similar projects completed in the past [X] years.
5.2 Resources and Equipment:
Overview of available resources and equipment.
Section 6: Quality and Safety
6.1 Quality Management System:
Details on the company's quality management system.
6.2 Safety Standards:
Description of safety standards followed by the company.
Section 7: Compliance
7.1 Legal Compliance:
Confirmation of compliance with all relevant laws and regulations.
 7.2 Ethical Practices:
Statement on the commitment to ethical business practices.
Section 8: Submission Instructions
8.1 Deadline:
Deadline for submission of the completed prequalification document.
8.2 Submission Address:
Address for submission and contact details.
Section 9: Evaluation Criteria
9.1 Evaluation Process:
Overview of the criteria and process for evaluating prequalification submissions.
9.2 Notification:
Information on how and when tenderers will be notified of the results

PROCEDURE FOR ISSUING TENDER DOCUMENTS AFTER PRE-QUALIFICATION

(ref link: tender process post prequalification)

Step 1: Pre-Qualification of Tenderers

Ensure that potential tenderers undergo a pre-qualification process to assess their capability and
resources as stated above.

Step 2: Understanding Project Considerations

Acknowledge that the lowest tender may not always be the most advantageous.

Consider working methods, environmental impacts, and risk assessment in addition to price.

Step 3: Tender Document Preparation

Draft comprehensive tender documents outlining conditions for the tender procedure and contract
conditions.

Include sufficient design-related information to facilitate responsible tender preparation.

Step 4: Evaluating Risk

Provide detailed technical information to minimize the contractor's risk and reduce project costs.

Recognize that vague specifications may attract irresponsible bidders and increase overall project
risk.

Step 5: Defining Tender Receipt and Review Process

Establish strict deadlines and policy guidelines for receiving and reviewing tenders.

Document and communicate the procedures to all involved parties.

Step 6: Tender Review and Decision

Review tenders considering contractor capability, resources, and the ability to meet specified
requirements.
Assess risks, including environmental factors, and evaluate the potential impact on the project.

Be cautious of lower prices from marginally qualified contractors that may not anticipate certain
risks.

Step 7: Collection of Comprehensive Information

Recognize the importance of collecting detailed information about environmental conditions to

minimize surprises and risks be it political or weather conditions.

Understand that upfront costs for comprehensive information can lead to a more economical
contract price in the long run.

Step 8: Consideration of External Factors

Include provisions for standing by and idleness in the contract, considering weather downtime as a
contractor’s risk.

Step 9: Awarding the Contract

Consider risk evaluation and allocation in the awarding process.

Strive for a "Best Value" contract that may have a higher short-term cost but provides better long-
term results.

Evaluate factors beyond the lowest price, including quality, options, incentives, ongoing
maintenance, and project lifespan.