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Supplier Selection and Pre-Qualification: Guidance, tools and tips

Introduction

This guidance is designed to help procuring authorities understand and apply the selection stage of a procurement process effectively and efficiently. It also explains how use of pre-qualification and Pre-Qualification Questionnaires (PQQs) can be a useful and integral part of this process. The guide primarily focuses on where the procuring authority is undertaking the selection/pre-qualification in-house, and takes procurers through all the key steps from advertising the requirement, through to assessment of expressions of interest, selection of a shortlist, through to debrief and issue of the Invitation To Tender (ITT) Where the procuring authority wishes to outsource an aspect or indeed all of its selection/pre-qualification process (e.g. through an accredited third party etc), the guide also provides further information on use of third party accreditors (TPAs)

What is "supplier selection" and "pre-qualification"?

Supplier Selection is an essential element of the procurement process. Procurers need to assure themselves that suppliers are suitable entities with whom to contract in terms of their legal standing, financial status and technical capacity. The process of supplier selection in terms of fitness to tender for public sector contract opportunities is also often referred to as 'pre-qualification'.

Supplier selection nornally involves pre-qualification via the supplier's completion of a Pre-Qualification Questionnaire (PQQ) template issued by the procuring authority, as an interim stage of the selection process. This provides a more structured means of capturing the information the procurer requires to select suitable suppliers.
Where a PQQ is used, it has three aims:

  • to collect required 'registration' information from potential suppliers
  • to ensure that remaining suppliers 'qualify' and meet or pass the threshold of competence to carry out the work, including eliminating potential suppliers from the competition who are:
    o not technically capable of meeting the requirements of the contract, or
    o do not have sufficient financial standing, or
    o are disqualified for reasons set out in the Public Contracts Regulations 2006 ('UK Regulations')
  • to rank potential suppliers where necessary and select an appropriate short list, reducing where appropriate the number of suppliers invited to tender to a manageable amount.

Although commonly used, not all selection processes need to involve Pre-Qualification/PQQs as the information requested can be included in OJEU (Official Journal of European Union) or contract advertisements. However, there are benefits to using a PQQ (e.g. it helps to make the selection process more manageable and efficient for both parties.)

Above threshold PQQ and guidance
Below threshold PQQ and guidance

The information requested in a selection process (either with or without a PQQ stage) varies according to the type of procuring authority and the nature of its requirement. It addresses the supplier's legal status, finances, capabilities and relevant past experience. Where the value of the procurement exceeds the OJEU thresholds, and the UK regulations apply, pre-qualification is commonly used, however it is often a feature of a low value below EU threshold procurements. OGC recognises that the maintenance of a comprehensive supplier selection service is a significant overhead for procuring authorities who have to demonstrate continued efficiency savings in the face of tight budgetary constraints. Therefore the idea of outsourcing selection/prequalification activity to third party accreditation service providers can be an effective option; however there are a number of considerations and risks to take into account. (Further information on third party accreditation will be developed during 2010) In the meantime, please refer to Procurement Policy Note (PPN) 09/09.

Now go to the step by step selection guide for in-house supplier selection.