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What Does Contractor Prequalification Mean?

Contractor prequalification is an information gathering and assessment process that determines a contractor’s capability, capacity, resources, management processes, and performance.

Typical subject areas include financial capacity and surety, work history, licensing and qualifications, management standards and, regulatory, quality, safety, and environmental performance data.

When used by local government, the potential bidders on projects are audited to assess their prequalification standing before bids are accepted. Only those bidders that are prequalified will be invited to submit a bid.


What is the prequalification of contractors and its impact on the success of the project?

One of the factors for the success or failure of projects is the selection of qualified contractors. In this regard, paying attention to the capabilities of contractors (evaluation indicators) and project objectives (project success factors) at the same time is of particular importance. The project organization tries to complete their projects within the framework of three key project indicators, namely cost, time and quality, in accordance with the defined goals, by selecting and guiding qualified contractors.

Lack of mastery of contractors’ technical and executive instructions, lack of required liquidity and poor supply of equipment required in executive operations cause delays, or defects in project implementation operations, both of which have a direct impact on the cost of the project.

What are the factors behind project delays or failures that affect contractors?

  • Choosing a contractor due to the low price on the subject of the contract
  • Weakness in the executive management of the contractor
  • Lack of planning and weakness in project planning and control
  • Insufficient contractor experience
  • Contractor financial problems
  • Poor performance of the contractor
  • Define posts and people in a project

In the current situation, it is very necessary to use standard mechanisms and methods to develop a model for the organization to see the least impact of the final product failure.

Who is the contractor?

A contractor is a natural or legal person with whom a contract is concluded for the execution of operations subject to the contract (design, construction, installation, supply). This definition refers to the four most important operations of the subject of the contract, the employer and his duties, documents and plans, and finally the amount of the contract.

Project contractors are divided into the following three categories:

  1. A general contractor is a company that has sufficient experience in the implementation and management of construction and installation projects and has the ability to execute and manage several projects at the same time.
  2. The contractor is a natural or legal person who specializes in executive work and the contractor contracts with him to perform part of the operations subject to the contract.
  3. A second-hand contractor is a contractor that the consulting engineer instructs to hire as a second-hand contractor.

Who makes up the evaluation team?

The Contractor’s Evaluation Team consists of the relevant project manager, the engineering team in charge and the project contractor in charge of examining the contractors’ evaluation using defined and proposed mechanisms and criteria.

What is the working process of the evaluation team?

To determine the body of the tender, the Tender Commission shall open and read the received bids in accordance with the Government Transactions Regulations. The commission first opens envelope A and if the contractor meets all the above conditions in the tender and sends the key documents. Initiates envelope B (amount offer sheet).

The bidder, after evaluating the bids and preparing a comparison table, is among the bids that meet all the conditions of the bidding and are not out of moderation in price. Selects the most suitable bid in terms of financial and other conditions and introduces it as the winner of the tender. The tender guarantee will be confiscated in favor of the employer if the winner of the tender refuses to conclude the contract, and the second person will be invited to conclude the contract.

Recent advances and proposed improvements in contractor prequalification methodologies



Contractor selection is a critical activity that plays a vital role in the overall success of any construction project. An initial cross-sectional survey indicates the wide range of different contractor selection practices followed by various clients around the globe, with apparently little interaction or comparisons during their development. A focus on the prequalification approaches (taken here to include ‘registration’) followed by some major public clients in Hong Kong, Australia and USA leads to an interesting overview of recent advances. This focus also highlights some strengths and weaknesses at the critical front-end of the contractor selection process. A proposed new model is developed by the authors for construction contractor prequalification. Finally, the advantages of developing a client advisory decision support system for advising clients on contractor prequalification are discussed, on the basis of the perceived needs and potential knowledge bases that may be tapped for this purpose.


Department of Civil Engineering, The University of Hong Kong, Pokfulam Road, Hong Kong

Received 26 April 1999, Accepted 22 November 1999, Available online 20 July 2000.

contractors prequalification with three filters


The International Federation of Consulting Engineers (FIDIC) second edition1994 for tendering procedures addressed the selection of tenderer and the preparation and evaluation of tenders for civil engineering contracts. Tendering procedures according to FIDIC include the following processes: project strategy, prequalification of tenderer, obtaining tenders, opening tenders, evaluation of tenders, and award of contract.

1. Project Strategy

The project strategy defines the way in which the project will be implemented, determines the role of each party involved and, where appropriate, specifies the waythe project will operate. To a large degree, contractual relationships between the parties and their individual rights, duties, and risks are thereby also determined by the project strategy.

2. Prequalification of the Tenderer

Prequalification Process includes preparation of prequalification documents, invitation to prequalify, issue and submission of prequalification documents, analysis of prequalification applicants, selection of tenderer, and notification of applicants(Fig. 2.4).

2.1 Preparation of Prequalification

Documents The aim of prequalification is to establish a list of capable firms whilst ensuring that a proper level of competition is safe guarded. To achieve these objectives and to give added encouragement for contractors to respond to invitation to tender, no more than seven organization should be prequalified unless the rules of the employer or financing institution otherwise dictate. Prequalification documents should give information about the project, the tendering procedure and the prequalification procedure. It is prepared by the employer/engineer and normally include the following:Letter of invitation to prequalifyInformation about the prequalification procedureProject informationPrequalification application

The FIDIC shortlisting criteria should generally include the following:

1. Company details, history, and commitments (focused on the last 5 years, but allowing older relevant examples)
1.1 Details of work performed as Prime Contractor.
1.2 Details of Projects Completed (similar nature and in the same geographical area).
1.3 Details of conformance to environmental codes and sustainability, labor safety, employee rights, security standards, and other governmental or third-party requirements.
1.4 Details of the current projects of similar nature
under execution.
2. Plant & equipment, personnel, and subcontractors
2.1 Major items of Contractor’s equipment proposed for carrying out the Works.
2.2 Qualifications and experience of key personnel suggested for administration and execution of the Contract.
2.3 Availability of equipment and personnel to
perform the Works, considering the extent and schedule of current projects being performed or recently awarded.
3. Financial details and legal status
3.1 Financial references of the Offer or’s main Bank.
3.2 Current financial details (attach financial statements & profit/loss statements for the previous 3 years).
4. Reference checks from the clients of the completed projects to know the Contractor’s performance, including any litigation history.

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