Project Selection Process S050

S050 - Pre-qualification

DEFINITION

Define and issue pre-qualification criteria for vendors wishing to be considered for the Invitation to Tender, and evaluate their responses to determine the list of vendors.

SUMMARY

Where there are too many potential candidates to receive the Invitation to Tender (ITT) it may be possible to introduce an additional selection stage whereby vendors must respond to an invitation to “pre-qualify” for consideration in the main evaluation.  Pre-qualification may also be required by certain client organisations as part of their normal approach or due to legal obligations.

The invitation to pre-qualify is issued to all “long-listed” vendors (or alternatively to all vendors responding to advertisements).  It includes a short and simple set of questions which the vendor must respond to.  These are used as the criteria by which the responses are assessed to determine a final list of vendors to receive the full Invitation to Tender.  The criteria should be chosen, so far as is possible, as key initial discriminators.

PATH PLANNING GUIDANCE

This process is optional.  It is only used where a formal pre-qualification process is needed to select vendors for full evaluation

DEPENDENCIES

Prerequisites (Finish-Finish):

• Definition of Requirements (either per Requirements Segment or other method)
• Advertise (if applicable)
• Establish “Long List” (if applicable)

Dependent procedures (Finish-Finish):

• Finalise list of vendors to receive ITT (S110)
• Issue Invitation to Tender (ITT)

RECEIVABLES

• Definition of Requirements (or client organisation’s equivalent documentation)
• List of vendors to contact

DELIVERABLES

• Invitation to Pre-qualify
• Failure to pre-qualify letter

TOOLS

• (none)

DETAILED DESCRIPTION OF TASKS

Why use pre-qualification?

There is much work involved in the evaluation of tenders, particularly where the requirements are complex.  This workload is multiplied by the number of vendors involved and responses received.  One way of reducing this to a manageable size is to include a pre-qualification stage in the selection exercise.  Pre-qualification may also be required by the client organisation where this is their normal practice or where there is a legal obligation to issue some form of invitation to any vendor responding to an advertised opportunity.

This may be used in combination with other methods of reducing the size of the list (subject to the requirements of the client organisation), see S010 Market Review, S020 Advertise, S030 Establish Long List.  Where this is the case, vendors should not normally be excluded after this process.  Once they have “qualified” for the full Invitation to Tender (ITT), it is usually unreasonable to disqualify them.

The “right” number of vendors to include in the formal Invitation to Tender process will depend on many factors.  For a very large requirement where there are likely to be several qualified vendors, then five may be too many.  For a small requirement in a field where many vendors have competitive products then it might be possible to evaluate as many as ten or fifteen proposals.

Pre-qualification criteria

Pre-qualification criteria should be simple to state and simple to evaluate.  Their purpose is to avoid work not to create it!

At this stage it is not the intention to judge differing levels of compliance with the requirements nor the relative merits of the various approaches that the vendors might suggest.  The criteria should establish whether the vendor is likely to be able to offer a feasible solution.

They should cover the basic essential aspects of the client organisation’s requirements, for example:

• which applications are required within the integrated solution,
• which basic areas of functionality are required within those applications,
• any special non-standard functional requirements,
• which other systems the software will need to integrate with or interface to,
• the hardware, system software and architecture the software should operate on (where this is fixed),
• the approximate size and complexity of the organisation’s processing needs, eg locations, numbers of customers, accounts, staff etc
• whether the vendor organisation is capable of providing the levels of commitment and service required, eg whether they have a support organisation in each country.

Format of document

The Invitation to Pre-qualify is usually sent out in the form of a simple letter describing the client organisation and its basic needs.  A set of detailed questions would be attached.  The letter may also request other key information such as the vendor’s legal status, accounts, brochures, manuals, etc.

In some unusual cases, usually in specific market environments, the client organisation may require financial bonds to be placed by the bidders (if so, specialist assistance may be required).

As with advertisements (see Process S020), there is a choice of tactics regarding the naming of the client organisation and the address to submit responses to.  If the client’s identity has not already been disclosed, the main options are:

• issue the invitation in the client organisation’s name - ensures proper attention is paid to the true customer but can involve an unwelcome amount of contact from salesmen,
• issue the invitation in the client organisation’s name but with the Consultant as the only named contacts - avoids the problem of too much contact from the salesmen and shows the selection process will be serious and fair; it can, however, distance the true customers from the process,
• issue the invitation in Consultant’s name with the client remaining anonymous - completely avoids the problem of unwelcome contacts but makes it difficult to give the vendors a good level of information about the organisation and its needs.

Evaluating the responses

Vendors’ responses should be evaluated.  Non-compliant responses should be rejected.

It is normally reasonable to reject some of the compliant submissions where it is clear that they offer a demonstrably less satisfactory solution.  However, care must be taken to ensure that this is achieved in a way which is fair and acceptable.

Where it is possible to do so, the vendors should be reduced to a desirable number for submission of the full Invitation to Tender document (ITT).

Vendors who have been rejected should be sent a simple letter of rejection.  If the rejected vendors contact the project team to ask for further explanation, it may be polite and appropriate to disclose any clear reasons why their submission was non-compliant.  Greater caution should be exercised before disclosing any other reasons for rejection.  It may be more appropriate to refuse to comment.