The Procurement Glossary » Supplier Prequalification

Supplier Prequalification

Sourcing & RFx

Definition

The process of screening suppliers against minimum requirements before inviting them to bid, to ensure only capable, compliant suppliers compete.

Explanation

Prequalification checks factors such as financial stability, certifications, insurance, capacity and compliance. It reduces risk and evaluation effort by filtering out unsuitable suppliers early, so the bid stage only involves credible candidates.

Example

Only suppliers holding ISO 9001 and RM5m liability insurance pass prequalification and receive the tender documents.

Related terms

• Supplier Selection — The decision process of choosing which supplier (or suppliers) to award business to after evaluating bids or proposals.
• Supplier Onboarding — The process of setting up a new supplier to trade — collecting details, verifying compliance and adding it to systems.
• Request for Information (RFI) — A preliminary questionnaire used to gather information about the market and potential suppliers before running a formal RFQ or RFP.
• Due Diligence — The investigation of a supplier's legitimacy, capability, financial health and compliance before engaging it.

Frequently Asked Questions

What is Supplier Prequalification?

The process of screening suppliers against minimum requirements before inviting them to bid, to ensure only capable, compliant suppliers compete. Prequalification checks factors such as financial stability, certifications, insurance, capacity and compliance. It reduces risk and evaluation effort by filtering out unsuitable suppliers early, so the bid stage only involves credible candidates.

Can you give an example of Supplier Prequalification?

Only suppliers holding ISO 9001 and RM5m liability insurance pass prequalification and receive the tender documents.

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