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Procurement Perspectives: The art of prequalification for government projects

Stephen Bauld
Procurement Perspectives: The art of prequalification for government projects

Many contractors and private sector service providers do not bid on government RFPs because they feel the prequalification process is too onerous.

Once again, it is the same concept explained in the article I just wrote on Jan. 30 called The roadmap for contractors to win government contracts.

It is a very easy process, if you know how to do it.

Prequalification is the first step in the procurement process related to bidding on large or multi-year contracts for all levels of government.

It is a requirement set out by the government agency to ensure the bidding pool has all the requirements to be able to perform the work. After you pre-qualify for the project, you are now able to enter into the formal bidding process known as a Request for Proposal or RFP.

It should be noted that prequalification is not used for all types of contracts. However, as a rule, some form of prequalification is likely where:

  • The contract is considered high risk, for instance, the contract provides for supply of a type that could result in a substantial cost, a gap in national security, political embarrassment or similar misfortune to the contracting authority if the contract is not performed in a satisfactory manner.
  • There is a need to minimize monitoring costs associated with the contract, with respect to the quality of work, the timelines of delivery or potential cost overrun.
  • The goals or service to be supplied must meet some defined standard (e.g., safety or environmental) or level of performance.
  • The performance of the contract involves a complex, multi-faceted activity, highly specialized expertise, equipment, material or financial requirements.

Oddly enough, most companies do not take the time to engage in the prequalification process, leaving the few bidders that do a greater opportunity to be one of maybe three bidders that were able to prequalify and bid on the project.

When government RFPs don’t have a prequalification process, you may be one of 10 proponents bidding on the work, cutting down your chances of winning dramatically.

Realistically, when your company has the skill set required to do the work described in the prequalification document, you should always take the time to submit this information to the government agency.

I have helped owners fill out prequalification documents for many different types of requirements and by doing so have increased their chances of winning government contracts exponentially.

As in filling out RFPs accurately, once you learn how to do it, answering all the questions succinctly to get maximum points, it will become second nature.

Where the proposed contract is for some reason likely to be considered out of the usual, a further advantage of the prequalification procedure is that it allows the contracting authority to test the market and determine whether there is sufficient market interest in bidding for a possible contract to justify expense and delay inherent in the formal bidding process.

Where a bid qualification procedure applies, a contracting authority may reject any bids received from an unqualified bidder, which again emphasizes the importance of completing and submitting the prequalification documents.

The overall purpose of the prequalification process is to ensure there is a reasonable prospect that each bidder who participates in a tender or RFP will have the demonstrated ability (i.e., expertise, capitalization and resources) to perform the final contract is in a satisfactory manner.

Once you take the time to answer all the questions in detail related to your expertise and resources, you can use that as a templet for any future requests.

The most important aspects of filling out the prequalification documents is to look at the points assigned for each question.

Make sure you have addressed each one in detail and fully comply with every request in the pre-qualification document.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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