---
title: "Pre-qualification: need, advantages, disadvantages"
subject: "Construction Management"
chapter: 5
key: "semester_8/construction_management:prequalification-advantages"
source: https://www.bctengineer.com/q/semester_8/construction_management/prequalification-advantages
site: BCT Engineering
---

# Pre-qualification: need, advantages, disadvantages

Construction Management · Chapter 5: Contract Management

- Asked in: 2068 Bhadra (old course), 8 marks
- Video: [Ep004 PMP | Procurement and Contracting Part 3 | Plan Contracting | Pre-Qualification | Partnering](https://www.youtube.com/watch?v=WQTW78B1HyI) — Amy iTree Inc
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/construction_management/prequalification-advantages
- Whole chapter: https://www.bctengineer.com/md/semester_8/construction_management/chapter-5

## Question

What is contractor's prequalification and why it is necessary? What are the advantages and disadvantages of prequalification?

## Short answer

Pre-qualification screens contractors before bidding on experience, finances, equipment, and personnel. It ensures only capable firms bid, reducing risk of failure, saving evaluation time and cost, encouraging serious bids, lowering disputes, and matching contract size to market capacity.

## Answer

**Pre-qualification (PQ)** is the screening of contractors before the tender on their experience, finances, equipment and personnel, so that only qualified firms are invited to bid for the project.

#### Why necessary
- Ensures that only capable contractors take part in big, complex or specialised works, reducing the risk of delay, poor quality and abandonment.
- Saves the client the time and cost of evaluation, and saves unqualified firms the cost of bid preparation.
- Promotes fair competition among serious bidders and avoids unrealistically low bids.

#### Advantages
1. Reliable contractors; lower risk of failure.
2. Fewer bids, so faster and more detailed evaluation.
3. The bidders know their competitors are of similar strength, which encourages them to bid seriously.
4. Reduces disputes and claims during execution.
5. Better chance of the project finishing on time, within cost, and with quality.
6. Lets the client match the size of the contract packages to the capacity of the market.

#### Disadvantages
1. Takes extra time and cost before the bidding.
2. Reduces competition, and may lead to higher bid prices or cartels.
3. Risk of bias or favouritism if the criteria are not clear; disputes from those rejected.
4. May exclude new, small or local firms with potential.
5. A firm's qualification (for example, its financial position) can change between PQ and bidding, so a recheck is needed.
6. The PQ documents need effort from both the bidders and the client.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Prequalification is:
   A. Screening contractors before tender so only qualified firms bid
   B. Evaluating the lowest bidder after opening
   C. Awarding the contract
   D. Releasing bid security
   Answer: A. It checks experience, finance, equipment and personnel. (Key point: Definition)

2. Why is PQ necessary for big works?
   A. It increases the number of bidders
   B. Reduces risk of delay, poor quality and abandonment by unqualified contractors
   C. It removes need for evaluation
   D. It lowers competition on purpose
   Answer: B. It also saves evaluation time. (Key point: Necessity)

3. A disadvantage of PQ:
   A. More unqualified bidders
   B. Higher disputes
   C. Extra time and cost, reduced competition, possible bias
   D. Shorter overall process
   Answer: C. It may exclude new small firms. (Key point: Disadvantage)

4. Why recheck qualification at bidding?
   A. PQ results are never valid
   B. Bid security needs it
   C. To lower bids
   D. Financial position may change between PQ and bidding
   Answer: D. Qualification can change. (Key point: Recheck)

## Related in Construction Management

- [Pre-qualification of contractors and its need](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Aprequalification-need) — Construction Management, chapter 5, asked 5×
- [Pre-qualification steps vs post-qualification](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Aprequalification-steps-post) — Construction Management, chapter 5
- [Contractor pre-tender stage planning](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Acontractor-pretender-planning) — Construction Management, chapter 2
- [Contractor cash flow estimate and critical stage](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Acontractor-cash-flow-estimate) — Construction Management, chapter 6, asked 2×

## Related in other subjects

- [Need for pre-emphasis and de-emphasis in FM](https://www.bctengineer.com/question.md?key=semester_6%2Fcommunication_systems%3Aneed-pre-de-emphasis-fm) — Communication Systems, chapter 3
- [Limiter-discriminator FM demodulation; need for pre-emphasis](https://www.bctengineer.com/question.md?key=semester_6%2Fcommunication_systems%3Alimiter-discriminator-pre-emphasis) — Communication Systems, chapter 3
- [Contractor friend's dinner and guesthouse offer](https://www.bctengineer.com/question.md?key=semester_8%2Fengineering_professional_practice%3Afriend-dinner-guesthouse-ethics) — Engineering Professional Practice, chapter 7
- [Unpaid sub-contractor beaten by labourers](https://www.bctengineer.com/question.md?key=semester_8%2Fengineering_professional_practice%3Asubcontractor-unpaid-labour-case) — Engineering Professional Practice, chapter 7