10 Jun Prequalification: Same for all or Tailored?
Should the contractor prequalification process be the same for all contractors or should the process be tailored to the contractor?
There are a few critical elements that apply to all contractors universally, and that list covers a broad range of due diligence in the majority of cases.
Beyond the basics, a more fit-for-purpose approach to prequalification is preferred because redundancy can be scrubbed out. It allows for the right things to be done at the right times in the procurement cycle.
For example, it is not valuable to require contractors to purchase expensive insurance products at the prequalification stage. The intent at prequalification is to determine the insurability of the contractor. When the procurement process moves to the Request for Proposal stage, or even at contract award, then upgraded insurance coverage consistent with the scope of work and the risk exposures can be acquired by the contractor.
Likewise, lengthy, audit-like prequalification questionnaires create a lot of administrative effort for the contractor and result in large volumes of data that many purchasing organizations do not consider when making contract award decisions.
It is recommended that a more practical and business-friendly approach to pre-screening contractors is preferred. Then proceed with ‘project’ or ‘work-scope’ specific screening with a smaller number of the most viable contractors being considered for the work.