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Pre-Qualification of Suppliers

Posted 1/10/2020

There are two types of pre-qualification of suppliers:

  1. 1.      Pre-Qualification to a list of suppliers of similar commodities and or services:

A list of pre-qualified suppliers requires the buyer to actively manage any such list. The terms of how the list will be managed and who may draw from the list must be stated in the invitation to pre-qualify. A closed list is restricted to a maximum 3-year term per CFTA. An open list must be opened to invite additional suppliers and possibly modification of terms of included suppliers no less frequently than annually. The list could be left open for application on a continuous basis.

  1. 1.      Pre-Qualification as the initial step in a multi step procurement:

Reasons to pre-qualify suppliers to a subsequent procurement process include:

  • The buyer wants to know if there are capable suppliers for a service or commodity and wants to reduce procurement risk. In this instance best practice suggests that all who respond could be invited to participate in the subsequent procurement.
  • The buyer wants to restrict the number of suppliers invited to bid the supply to the best qualified available. This may be because there are a lot of suppliers in that marketplace and the buyer is only interesting in doing a detailed evaluation of the best available to a short list. The buyer may also want to issue the subsequent request to a short list because the procurement is complex and will require considerable effort on the part of suppliers to respond. In this instance the buyer is probable to get better bids because potential suppliers will apply extra effort when their chances to win a contract are higher than an open call. Finally, the buyer may need to disclose confidential information in a request and does not want this information disclosed on a public bid site. By short listing qualified bidders to a second step, appropriate cautions can be employed to protect that information.

Article 508 of the Canadian Free Trade Agreement addresses Pre-Qualification of suppliers.