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?
Government contracts – the PQQ stage
Any government body procuring goods or services has certain regulations that they must abide by in order to choose a supplier – if the contract is over a certain threshold they cannot just choose who they like.
The procurement process follows a PQQ and tender stage, in which the bidding company are evaluated on both financial and quality elements. This process means there is much 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 for government contracts.
The PQQ procurement process
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 each supplier has 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.
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. They introduced a pre-selection phase, aimed at eliminating some applicants at the first hurdle, and so the PQQ stage of the procurement process 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, meaning only a handful of companies go through to the tender stage.
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 the relevant experience
The PQQ stage is 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 the PQQ stage? Stuck at the PQQ stage and not progressing any further? Talk to Executive Compass about how you can benefit from our experience.