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<p>Construction contracts are normally awarded to a qualified bidder who is having:</p>
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<p>- Appropriate capabilities; and</p>
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<p>- Other resources.</p>
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<p>This can be achieved in two ways:</p>
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<p>a) To verify whether the selected bidder possesses the required qualifications and experience before the contract award (post qualification);</p>
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<p>b) To ensure that bids are submitted only by firms that have the necessary qualifications and experience (pre-qualification).</p>
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<p>Hence <strong>Purpose of Pre-qualification</strong> is:</p>
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<p>To ensure that bids are submitted only by firms, or a group of firms possess the necessary qualification in terms of:</p>
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<p>a) Experience and past performance,</p>
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<p>b) Financial capacity; and</p>
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<p>c) Technical capability concerning personnel, equipment, and plant<strong>.</strong></p>
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<p>Prequalification is generally used for;</p>
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<p>Large or complex civil works;</p>
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<p>Design and Build or Turnkey contracts;</p>
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<p>Supply and installation of expensive or technically complex industrial plant/equipment.</p>
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<h2 class="wp-block-heading"><strong>Advantages of pre-qualification:</strong></h2>
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<h3 class="wp-block-heading"><strong>For insufficiently qualified bidders;</strong></h3>
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<ul><!-- wp:list-item -->
<li>Avoid the expense of bidding;</li>
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<li>Encourage to form joint ventures.</li>
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<h3 class="wp-block-heading"><strong>For clients</strong></h3>
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<ul><!-- wp:list-item -->
<li>Protect from unqualified bidders;</li>
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<li>Indicate the number of firms interested in bidding;</li>
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<li>Reduces the amount of work/time involved in evaluating bids from unqualified bidders;&nbsp;</li>
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<li>Assess the eligibility for domestic preference.</li>
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<h3 class="wp-block-heading"><strong>For qualified bidders;</strong></h3>
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<ul><!-- wp:list-item -->
<li>Encourages reputable contractors to bid;</li>
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<li>Encourage them to price their bids with the awareness that they are competing against other qualified bidders;</li>
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<li>Assures the bid will not be rejected on qualification grounds.</li>
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<h2 class="wp-block-heading"><strong>Disadvantages of pre-qualification:</strong></h2>
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<ul><!-- wp:list-item -->
<li>Increase procurement lead time;</li>
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<li>The client is required to review all prequalification applications;</li>
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<li>Collusion is easier among a limited number of bidders.</li>
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<h2 class="wp-block-heading"><strong>Pre-qualification Process;</strong></h2>
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<ul><!-- wp:list-item -->
<li>Advertisement;</li>
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<li>Issue of Pre-qualification Questionnaire;</li>
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<li>Receipt of pre-qualification applications;</li>
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<li>Evaluation of applications;</li>
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<li>Inviting all firms found capable of performing the contract to submit bids.</li>
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<h2 class="wp-block-heading"><strong>Evaluation of prequalification applications:</strong></h2>
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<ul><!-- wp:list-item -->
<li>Criteria comprise establishing whether the applicant has adequate:</li>
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<li>Financial capacity;</li>
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<li>Technical capacity;</li>
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<li>Relevant experience.</li>
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<h2 class="wp-block-heading"><strong>Methods of Evaluation</strong></h2>
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<p>Two methods are widely practiced:</p>
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<p>a) Scoring system:</p>
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<p>b) Pass/fail criteria.</p>
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<h2 class="wp-block-heading"><strong>Scoring system:</strong></h2>
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<h3 class="wp-block-heading"><strong>Major features:</strong></h3>
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<p>Establishment of groups and assignment of the minimum score;</p>
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<ul><!-- wp:list-item -->
<li>Assignment of sub-criteria to each group.</li>
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<li>Usually 3 groups;</li>
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<li>&nbsp;Financial capability;</li>
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<li>Technical qualifications (management, staff, and equipment);</li>
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<li>Experience (including past performance).</li>
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<h2 class="wp-block-heading"><strong>Pass/fail criteria:</strong></h2>
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<h3 class="wp-block-heading"><strong>Major features:</strong></h3>
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<p>Pre-qualification will be based on applicants meeting all the minimum pass-fail criteria of the predefined factors given in the prequalification document.</p>
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<h2 class="wp-block-heading"><strong>Factors considered:</strong></h2>
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<ul><!-- wp:list-item -->
<li>General construction experience;</li>
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<li>Financial position;</li>
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<li>Personnel and equipment capabilities.</li>
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<h2 class="wp-block-heading"><strong>Pre-Qualification Document</strong></h2>
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<p>The pre-qualification document generally consists of:</p>
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<p>a) Invitation for pre-qualification;</p>
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<p>b) Instructions to applicants;</p>
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<p>c) Letter of application; and</p>
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<p>d) Standard forms to submit information.</p>
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