Prequalification

Prequalification is a procurement process in which a buyer evaluates suppliers against stated qualification criteria and identifies the suppliers eligible to take part in a later procurement or to receive specific opportunities. The assessment happens before the competition itself, so the buyer works from a defined group of suppliers that have already met the requirements.

In Ontario's Broader Public Sector Procurement Directive, a Request for Supplier Qualifications (RFSQ) gathers information about supplier capabilities and qualifications “with the intention of creating a list of pre-qualified suppliers.” Federal buyers apply the same idea through supply arrangements and selective tendering. In every case, being prequalified makes a supplier eligible. It does not award work.

How federal buyers prequalify suppliers

Public Services and Procurement Canada (PSPC) prequalifies suppliers through a Request for Supply Arrangement (RFSA). PSPC states that suppliers who meet the evaluation criteria in an RFSA become prequalified suppliers and holders of the relevant supply arrangement. A supply arrangement is a pool-based arrangement that lets departments solicit bids from prequalified suppliers for specific requirements, as described in how the ProServices supply arrangement works.

For Task and Solutions Professional Services (TSPS), suppliers must meet the mandatory criteria in the RFSA and submit an online response through the Centralized Professional Services System (CPSS) ePortal. PSPC explains that a responsive submission can result in a supply arrangement being awarded after evaluation.

CanadaBuys also describes selective tendering, which uses “a one-time list or a permanent list of prequalified offerors.” According to the CanadaBuys sourcing strategy guidance, the buyer must generally allow all prequalified offerors to participate, subject to any stated limits and selection criteria. The procurement documents must address any limit on the number of suppliers and the criteria that apply.

Prequalification through an RFSQ in Ontario

The Ontario directive authorizes broader public sector organizations to issue an RFSQ to build a list of prequalified suppliers. The list can identify qualified candidates for expected future competitions, or it can narrow the field for an immediate need. The RFSQ must state that prequalification does not oblige the organization to call on any listed supplier.

Where prequalification is limited or regulated

CanadaBuys states that prequalification is not normally used for real-property procurements, though it may be used where justified. Where it is used, the requirements are commonly pass/fail criteria assessed before price and bid security are opened.

Trade agreements also set rules. The CATSA trade-agreement procedure notes that the agreements contain rules governing the qualification and prequalification of suppliers. CATSA may limit tenders to prequalified suppliers where the process complies with those requirements.

Terms connected to prequalification

• Request for Supplier Qualifications (RFSQ): a document used to assess supplier capabilities and qualifications for future competitions or an immediate requirement.
• Request for Supply Arrangement (RFSA): a PSPC solicitation that establishes a pool of suppliers eligible for later requirements.
• Supply arrangement: the pool-based arrangement held by prequalified suppliers.
• Standing offer: an arrangement under which a supplier's offer is accepted for defined goods or services. It is not, by itself, a contract.
• Selective tendering: a method limited to suppliers on a prequalified list or otherwise chosen through a qualification process.
• Two-stage procurement: a qualification stage followed by an RFP or other competitive stage.

What prequalification means for a supplier

A supplier prequalifies by submitting the requested qualification information, such as evidence of capabilities and compliance with mandatory criteria. The submission must follow the method and meet the deadline stated in the RFSQ, RFSA or other notice. Missing a mandatory criterion or a deadline can keep a supplier off the list for the later competition.

Prequalification makes a supplier eligible for later opportunities, but it does not necessarily create a contract or guarantee future work. Bid teams should treat it as an entry requirement, then watch for the follow-on solicitations issued to the prequalified pool and prepare to respond to them.