CONSTRUCTION VENDOR PREQUALIFICATION: 10 Checklists for Accurate Vendor Prequalification

by / Monday, 15 February 2016 / Published in How To's
construction vendor prequalification

Vendor prequalification helps clients to ensure that construction contractors are well qualified, that services are obtained for reasonable cost, and that their projects are well organized contractually to minimize the potential for costly changes and delays.

This responsibility solely rests on the shoulders of procurement officers and managers; they are responsible for prequalifying vendors by investigating their general reputation, financial integrity, demonstrated ability, quality of performance, and prior project experience.

By so doing, they help ensure that appropriate standards are met. Below are 10 checklists for prequalifying vendors by procurement officers or managers.

10 Checklists for Accurate Vendor Prequalification

  1. Basic information: name, address, principal office, and type of business (corporation, partnership, individual, joint venture, other). A Dun & Bradstreet report may be desirable. Sapient Vendors is duly registered with Dun & Bradstreet and our corporate information and contact is readily accessible via their database.
  1. Years in Business: Length of time the organization has been in business as a general contractor and whether it has operated under other names. Businesses come and go, and rapid name changes may indicate instability. As the saying goes, with more years comes experience.
  1. Business Structure: for sole proprietorships and partnerships confirm the date of incorporation and names and addresses of general and limited partners. You want to know who you are dealing and want to be sure, that all partners are on board if it’s a partnership business. Awarding contracts to a partner without the consent of others, can lead to unforeseen negative outcomes down the road.
  1. Project Completion: whether the organization—or one of its partners or officers as a partner or officer of another organization—has ever failed to complete any work awarded. Details are usually sought, and follow-up may be necessary. A track record of completed projects is a big credibility booster to prospective clients when prequalifying vendors.
  1. Projects in Progress: list of major construction projects in progress, giving name of project, owner, architect, contract amount, percentage completed, and scheduled completion date. Following up with the architects of these projects may provide valuable insights. You can view our project portfolio with relevant images by clicking here; the contacts of the project owners are also available on request for further confirmation.
  1. Project History: list of construction projects completed in the last five years, giving name of project, owner, architect, initial and final contract amounts, date of completion, percentage of the cost of the work completed with the contractor’s own forces, and number of requests for information and change orders. Visits to some of these projects may be in order. Click here to view our project history till date.
  1. Team Experience: construction experience of the individuals being proposed to manage this project. This is the same as the project team being presented by the vendor; they have to possess relevant skills as well as practical experiences suited for the project. Click here to access the profile of our team.
  1. Credible References: trade and bank references; such as recommendations from reputable associations like local or international chambers of commerce. For example, Sapient Vendors is a dully registered member of both South African and American Chambers of Commerce in Nigeria. Their references have proved useful severally in prequalifying us to prospective clients. Also, be sure to confirm every reference, don’t just take their word for it, a follow-up may be in order.
  1. Legal History: litigation history, including complaints, claims, demands for arbitration, and lawsuits brought by (and against) the organization in, say, the last five years. You don’t want to hire a vendor who has a history of unresolved legal cases, especially if they are the accused.
  1. Financial Statement: audited if available, including the contractor’s latest balance sheet and income statement. This is necessary for evaluating the financial capability of the vendor to ensure they have the financial power to deliver the project under the agreed timeline and most especially, budget. Ours is always available on request.

PS.

This is our first publication for this year 2016; we’ve been very busy with some internal strategic planning necessary for the next phase of the company. We will announce the results of all our hard work soon, stay tuned!

2 Responses to “CONSTRUCTION VENDOR PREQUALIFICATION: 10 Checklists for Accurate Vendor Prequalification”

  1. […] As a procurement officer, you are always faced with incredible difficult choices to make on a daily basis regarding construction procurement. […]

  2. […] in Nigeria should avoid giving their project to the lowest bidder without adequately prequalifying the vendor, especially with regards to their history with cost variation and project completion or history […]

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