Pre-qualification of contractors and its need

Pre-qualification is a screening process in which interested contractors or consultants are assessed before the tender for their experience, finance, equipment and personnel. Only those who qualify are invited to submit tenders.

Process

1. The client invites applications for pre-qualification (PQ) by public notice.
2. Contractors submit PQ documents: company profile, past similar works, financial statements, plant and equipment, key staff, litigation record.
3. The PQ committee evaluates against the criteria set in advance.
4. A list of qualified applicants is published; they alone receive and submit the bid.

Why it is necessary

• Ensures capability: only contractors with the needed experience, equipment and finance are allowed, so the project is completed on time with quality.
• Reduces the risk of failure, abandonment, delay and cost overrun.
• Saves time and cost of evaluation: fewer bids for the client to evaluate, and the unqualified firms do not waste the cost of bid preparation.
• Better competition among genuine bidders; avoids unrealistically low prices from weak firms.
• Transparency and fairness as the criteria are known and equal for all.
• Useful for large, complex and specialised projects (dams, bridges, tunnels, large buildings), and in Nepal it is allowed under the Public Procurement Act (for contracts above a set size).

(Post-qualification, where the lowest bidder is checked afterward, is an alternative used for simple works.)