1

Contractor Pre-qualification

2

What Is Contractors PQ?

Screening construction contractors according to a pre determined set of criteria in order to determine their competence or ability to participate in the project bid.

3

Awarding Authorities Should Verify That the Bidder Has: Adequate financial resources,

experience, personnel resources, and equipment to perform the task.

The ability to comply with the required performance and time schedule.

4

Benefits of PQ Avoiding overburdened of the

contractor. Elimination limited financial sources

contractors. Only the qualify will stay. Protecting the contactor. Speeding devaluation & awarding

process. Moving from subjectivity to

objectivity.

5

Tenders PQEmployer/ Engineer Contractor

Acknowledge Receipt

Analyze PQ data: Company/ Joint venture structure Experience & Resources. Financial & General stability

Select Company/ Joint venture for inclusion in list of Tenderers.

Notify all Contractors/ Joint venture of the list of selected Tenderers.

Invitation to Contractors to Pre-qualify.

Issue and Submission of PQ Documents.

Respond to Questionnaires on Company/ Joint venture

Acknowledge Receipt

Confirm Intention to Submit Valid Tender

Analysis of PQ Data selection & Notification of List of selection

Place PQ Advertisement In Press, Etc. As Appropriate Stating: Employer & Engineer Outline Of Project (Scope, Location, Etc.) Enquiry Issue & Tender Submission Date. Instruction For Applying PQ. Submission Date For Contractor. PQ Data.

Request PQ Documents

Issue PQ instruction & Questionnaire requesting from each company/ Joint venture: Organization and Structure. Experience in Same Type of work. Resources (Managerial, Technical,

labor, etc). Financial Statement

6

Contractor Data Sources:

1. Internal: Reports,documents, ..Etc.

2. External: Questionnaire filled by the contractor. Additional sources (banks, suppliers,..Etc). Site visits to currently projects done by the

contractor.

7

Typical Questionnaire Includes:

Introduction: a brief description of the project.

Organization: classification and company’s organizational chart.

Financial resources: financial capability of the contractor.

Physical resources: contractor manpower, equipment, …etc.

Experience: contractor experience on similar projects.

8

Gather Contractor Data (PQ Questionnaire)

Check Sufficiency & Correctness of Data

Available Data not Sufficient to make a Decision

Available Data Sufficient to make a Decision

Gather More Data

Apply Contractor Data to criteria (Systematic Model)

Decision

Qualify Contractor Reject Contractor

Contractor Informed to Collect Bidding Documents

Inform Rejected Contractors

Contractor Submits a Proposal

Development of Criteria (Questionnaire)

Contractor PQ Process

9

PQ Elements 1)LITTER TO CONTRACTORS (invitation) 2)PRE-QUALIFICATION FORM:

A) Information for the contractor: i)Objective and scope of workii)General information

1)Degree of eligibility2)Formation of partnership or joint venture3)Bonding capacity4)Official language5)Supply materials

10

PQ Elements Cont..6)Questionnaire submission

7)Beginning and duration of construction

B) PQ questionnaire:

i)Identification of the contractor

ii)Contractor performance

iii)Contractor’s equipment

iv)Construction ability

v)Completion ability

vi)Client relationship

C)Certification and waves

11

Contractor Rating Strategies:

A) dimensional weighting strategy:

Contractor SelectionCriteria

WEIGHT

(%) X

Contractor

A B CY X*Y Y X*Y Y X*

Y

Experience in Completion of Project on Schedule.

60 9 5.4

8 4.8 4 2.4

Present Workload & Capability to Support Project

25 6 1.5

7 1.75

7 1.75

Availability of first-Line Supervisors

15 3 0.45

5 0.75

6 0.9

Total Score 100

6.45 7.3 5.05

12

Contractor Rating Strategies Cont.. B)two-step pre-qualification: Allow to eliminate unwanted

contractors. Contractor to satisfy selected

screening dimensions. If passes, use DWS with more

specific criteria.

13

Project: -------------------- Determining For Weights Evaluation

CRITERIA RAW SCORE

ASSIGNED SCORE

A Experience 6 10 B Equipment 2 3.3 C Financial Resources 1 1.7 D Reputation 2 3.3

B C D A A-2 A-3 A/ D B B/ C B-1 C D-1 D

3- Major Preference. 2- Medium Preference. 1- Minor Preference. 0- No Preference.

Paired Comparison Criteria Weighting:

14

Contractor Name: ---------------------- Grade: --------- Address: ---------------------------------

CRITERIA

Wei

ght

5 E

xce

4

V. G

3 G

ood

2 Fa

ir

1 Poo

r

A Experience 10 x 40 B Equipment 3.3 x 16.5 C Financial Resources 1.7 x 5.3 D Reputation 3.3 x 6.6

TOTAL SCORE 68.4

Evaluation Matrix:

15

Model Philosophy:

Uses DWS based on multiple-criterion decision-making.

Approach assumptions: Impact for each criterion ( 1unsatisfactory to

10 excellent). Obtain numerical value from PQ

questionnaires. Addition or deletion of decision parameters

have no dependency of model’s parameters.

16

CDF (Experience)

DF (Size of Completed Projects)

DF (Type of Completed Projects)

Example of Decision Parameters

Model Philosophy Cont..

17

Model Calculation: a. Calculate the mean impact for each DF included in each CDF. b. Calculate the DF weight to each DF from equation: Where: wij = the weight of the DFj associated with the CDFi . DFMIij = the mean impact of the DFj associated with CDFi, zero (no impact) to four (very high impact).

)1.(

1

EqmDFMI

DFMIwij

i

jij

ij

18

c . C a lc u la t e t h e m e a n im p a c t f o r t h e C D F f r o m e q u a t io n :

)2.(1 Eqm i

m iDFMI ij

CDFMI ij

W h e r e : C D F M I i= m e a n v a lu e o f C D F .

m i = t h e n u m b e r o f D F s in t h e C D F .

d . C a lc u la t e t h e w e ig h t o f t h e C D F u s in g t h e e q u a t io n :

)3.(

1

Eqn

iCDFMI i

CDFMI iw i

Model Calculation Cont..

19

c . F in d t h e a g g r e g a t e s c o r e o f t h e c a n d id a t e c o n t r a c t o r K

u s in g t h e f o l l o w in g e q u a t io n :

)4.(11

Eqm i

jR ijKw ij

n

iw iAWS K

W h e r e : A W S K : a g g r e g a t e w e ig h t e d r a t in g f o r t h e c o n t r a c t o r K .

n = n u m b e r o f C D F s ; m = n u m b e r o f D F s in t h e C D F .

R i j K : s c o r e o f t h e D F j i n t h e C D F i f o r t h e c o n t r a c t o r K o n s c a le o f 1 ( u n s a t i s f a c t o r y ) t o 1 0 ( e x c e l l e n t f o r s p e c i fi c p r o j e c t ) .

Model Calculation Cont..

Example:Contactor A:

CDF(1) DF DFMI Wij CDFMIi Wi Rijk Wij*Rijk AWSK1Banking Arrangement 2 0.222 3 0.667Bonding Capacity 4 0.444 4 1.778Financial Statement 3 0.333 8 2.667

CDF(2) DF DFMI Wij CDFMIi Wi Rijk Wij*Rijk AWSK2Success of Completing Projects 3 0.375 4 1.500Size of Completing Projects 2 0.250 3 0.750No of Similar Comletdd Projects 2 0.250 6 1.500Types of Completing Projects 1 0.125 5 0.625

CDF(3) DF DFMI Wij CDFMIi Wi Rijk Wij*Rijk AWSK3Current Work load Current Work load 3 1 3 0.375 7 7 2.625

AWSK (A)Total = AWSK1+AWSK2+AWSK3 = 5.635

1.9167

5.111

Financial Stability

9

3 0.375

Experience 2 0.25 1.0938

73

8 4.375

m i

jR i j Kw i j

1

m i

jD F M I i j

1

m i

jD F M I i j

1

m i

jD F M I i j

1

m i

jR i j Kw i j

1

m i

jR i j Kw i j

1

Example Cont..Contactor B:

CDF(1) DF DFMI Wij CDFMIi Wi Rijk Wij*Rijk AWSK1Banking Arrangement 2 0.222 5 1.111Bonding Capacity 4 0.444 3 1.333Financial Statement 3 0.333 7 2.333

CDF(2) DF DFMI Wij CDFMIi Wi Rijk Wij*Rijk AWSK2Success of Completing Projects 3 0.375 3 1.125Size of Completing Projects 2 0.250 5 1.250No of Similar Comletdd Projects 2 0.250 4 1.000Types of Completing Projects 1 0.125 8 1.000

CDF(3) DF DFMI Wij CDFMIi Wi Rijk Wij*Rijk AWSK3Current Work load Current Work load 3 1 3 0.375 6 6 2.25

AWSK (B)Total = AWSK1+AWSK2+AWSK3 = 5.135

63

8 4.375

Experience 2 0.25 1.0938

1.7917

4.778

Financial Stability

9

3 0.375

m i

jR i j Kw i j

1

m i

jD F M I i j

1

m i

jD F M I i j

1

m i

jD F M I i j

1

m i

jR i j Kw i j

1

m i

jR i j Kw i j

1

Example Cont..Contactor C:

CDF(1) DF DFMI Wij CDFMIi Wi Rijk Wij*Rijk AWSK1Banking Arrangement 2 0.222 4 0.889Bonding Capacity 4 0.444 8 3.556Financial Statement 3 0.333 6 2.000

CDF(2) DF DFMI Wij CDFMIi Wi Rijk Wij*Rijk AWSK2Success of Completing Projects 3 0.375 4 1.500Size of Completing Projects 2 0.250 6 1.500No of Similar Comletdd Projects 2 0.250 3 0.750Types of Completing Projects 1 0.125 7 0.875

CDF(3) DF DFMI Wij CDFMIi Wi Rijk Wij*Rijk AWSK3Current Work load Current Work load 3 1 3 0.375 8 8 3

AWSK (C)Total = AWSK1+AWSK2+AWSK3 = 6.573

83

8 4.625

Experience 2 0.25 1.1563

2.4167

6.444

Financial Stability

9

3 0.375

m i

jR i j Kw i j

1

m i

jD F M I i j

1

m i

jD F M I i j

1

m i

jD F M I i j

1

m i

jR i j Kw i j

1

m i

jR i j Kw i j

1

Result: Contractor A has the highest score followed by Contractor C then contractor B.

23

Model Advantages:

Simple and understandable. Provides a systematic approach for

all candidate evaluation. The calculated aggregate weighted

score for each contractor provides a basis for comparison.