PQQ stage of the bidding process

Are you familiar with the PQQ stage of the bidding process? Why is it important? Where does it come from and where does it lead to?

The PQQ Stage

In the olden days, anyone who wanted a product or service would just get their mate from down the road, or their cousin, or a random person picked out of the trade papers, or the person they’d always used, to provide that product or service, probably without due diligence processes or any forms of checks, balances and accountability, whether they were a private sector organisation or a local authority.

All of that has changed, and it’s generally a change for the better, with more accountability and more emphasis on value for money, added value and making sure the right company is providing the right services. Well, that’s the theory, anyway. Add in the EU with its many and various requirements, and you end up with a tendering system. And, indeed a PQQ stage, too. But let’s look at the bigger picture first.

Imagine that Local Authority A wants to procure Service X, which is supplied by Suppliers M, N and O. Instead of just going with the first one to grab their attention, or their cousin who runs Company O, they will put out a tender document, which will have a list of questions all of the suppliers have to answer, including ones on price, service, experience and policies.

Now, it used to be simple: the cheapest offering won the contract. But nowadays all sorts of other issues are important, such as corporate social responsibility, community involvement and green policies.

But anyway, as more and more suppliers realised they could apply to complete these tenders, procurement officers were getting overwhelmed with long, complex responses to long, complex tender documents. So they introduced a pre-selection phase, aimed at eliminating some applicants at the first hurdle, and so the PQQ stage was born.

The PQQ or pre-qualification questionnaire, stage is a way to filter out those suppliers who are not suitable to provide the service.

This could be because they:

• Are not financially stable
• Do not have the relevant insurance
• Do not have a high enough turnover (therefore couldn’t cope with this big new contract)
• Do not have the relevant policies and procedures
• Do not have relevant experience

It’s a quicker way than a huge tender document for suppliers and contracting authorities to find out whether they’re suitable to supply the contract, and in fact a good way for suppliers to check their own suitability for the kinds of contract they want to go for.

Not sure how to approach PQQ stage? Stuck at PQQ stage and not progressing any further? Talk to Executive Compass® about how you can benefit from our experience.