Pre-Qualification of Bidders

Third Party Procurement

Frequently Asked Questions

Q = Question; A = Answer

Q. Do owners normally prequalify bidders prior to issuance of bid documentation or is this process conducted once the bid documentation is issued after a call/invitation for bids but before closing date for evaluation of proposals? What are the best practices in this regard? Under what circumstances would you prequalify bidders before and after issuance of bid documentation?

A. We would suggest you read the discussion of Prequalification and Multi-Step Procurements in the Best Practices Procurement Manual (BPPM). These are sections 2.4.2.2.4 - Prequalification and 4.7.1 - Multi-Step Procurements. (Revised: October, 2010)

Q. May we use a Request for Qualifications to develop a vendor list to buy commodities? We're buying traffic signal poles for our LRT system using FTA funds. I get conflicting answers from my local "experts."

A. The process you propose of prequalifying potential suppliers and then soliciting prices, delivery, etc. from them as future needs arise is acceptable, but be aware of the requirement in FTA Circular 4220.1F which states that bidders must be allowed to qualify during the solicitation periods, including the second phase where you solicit prices, but you do not have to extend the price solicitation period to accommodate a supplier that is seeking to qualify. (Revised: October, 2010)

Q. FTA Circular 4220.1F states that grantees shall not preclude potential bidders from qualifying during the solicitation period, which is from issuance of the solicitation to its closing date. The Best Practices Procurement Manual, when discussing this issue in Chapter 2.4.2.2.4 states that a grantee would not be expected to delay a proposed award (extend a solicitation period) in order to afford a vendor the opportunity to demonstrate that its product meets the standards in the specification. Therefore, does this mean that an agency can stipulate that all requests for prequalification must be made by bidders X days prior to the closing/bid due date (where X = the amount of days necessary for procurement staff to review and qualify bidders)?

We have some very large construction contracts coming up and I want to ensure we only have qualified bidders submitting bids.

A. You may stipulate that all requests for prequalification must be made sufficiently in advance of the closing date for bids so as to ensure there will be no need to extend the solicitation period or delay the award. (Revised: October, 2010)

Q. FTA Circular 4220.1F provides that "grantees shall not preclude potential bidders from qualifying during the solicitation period." My client maintains a prequalification program which does preclude potential bidders from qualifying if they fail to meet the pre-qualification criteria. How can I reconcile this action with the language of Circular 4220.1F? This involves a bus procurement where a bidder has been disqualified per our pre-qualification program as a result of the bidder's previous poor performance on our contracts.

A. The situation you describe where a bidder has been determined "unqualified" based on poor past performance is in fact a determination of non-responsibility. FTA's requirement to allow potential bidders to become qualified during the solicitation period does not require non-responsible bidders to be given the opportunity to demonstrate they have become responsible. In other words, your situation is not in conflict with FTA Circular 4220.1F. We would caution, however, that at some point you must allow this bidder to present evidence that it has solved its performance problems, and you must examine that evidence to determine if the bidder's non-responsibility status should be changed. (Revised: October, 2010)

Q. What document or guidance defines what is a prototype vehicle?

A. The FTA "Dear Colleague" letter dated June 13, 1994, defines prototype vehicles as "the first five (5) pre-production/new technology demonstration vehicles incorporating a major new design or major new components."

However, should a manufacturer sell or lease more than a total of five prototype vehicles, regardless of whether it is to a single grantee or to multiple grantees using Federal financial assistance for their purchase or lease, any buses beyond the original five are considered by FTA to be production vehicles and thus subject to all Bus Testing requirements." (Reviewed: October, 2010)

Q. Would the FTA requirement for "full and open competition" be satisfied by the following procurement method? An open solicitation is issued to all prospective construction contractors asking for proposals in reference to their qualifications in certain trades. A shortlist of three firms is developed based on these proposals and task order contracts are awarded to the three. As work is defined during the year, the three firms are asked to submit bids, and a selection for that job is made based on the low bid. The task is then issued on a firm fixed price basis to the low bidder.

A. We believe the procedure for awarding job order contracts does not meet the FTA requirement for full and open competition because the pre-qualification procedure arbitrarily limits the number of bidders who can compete for the job orders as they arise. We would advise that the pre-qualification procedure not limit the number of qualified firms but that all qualified firms be identified and allowed to submit bids on the job orders when as the work is defined. The Best Practices Procurement Manual (BPPM), Section 2.4.2.2.4 - Pre-qualification, discusses FTA policy in this area. FTA Circular 4220.1F requires grantees to allow potential bidders to qualify their products/services during the solicitation period, and it does not allow for an arbitrary limit on the number of qualified offerors that are allowed to submit bids or proposals. (Revised: October, 2010)

Q. Our organization is in the process of attempting to achieve ISO 14001 certification. During this process we have been advised that to aid in the process we might consider a list of "approved contractors" that comply with our environmental standards and use the contractors environmental performance as a factor in awarding contracts. Can we make ISO 14001 compliance a requirement in an IFB? If it is a factor in the RFP process how much weight can be given? Can a contractor be excluded simply because they do not comply with our facilities environmental standards for purposes of ISO 14001? Thank you for any help and guidance you can provide.

A. It is my understanding that your agency is considering a prequalification procedure for all your third party contractors that would have them meet you agency's environmental program initiatives/requirements in order to be eligible for a contract award. Our concern is that you would impose these environmental requirements on all third party contractors regardless of whether the work on the contract would actually affect the environment. In other words, you would impose these requirements on all of the contractors' operations even though the nature of the work to be done, e.g., a study of traffic patterns, an annual audit of financial statements, etc., had no environmental aspects to it. Our conclusion is that you should not impose these requirements where there is not an actual need for them. If a contractor will be doing work that could potentially affect the environment, then it would be appropriate for the agency to require procedures that protected the environment, but to impose requirements on all of the contractor’s operations, e.g., those that have nothing to do with the work on your contract, or which do not affect the environment, would not be appropriate, and would in fact be an unreasonable restriction on competition. (Posted: December, 2014)