Developing a Good PQQ – three types of question that support an effective procurement process

We’ve now run the BravoSolution supported Evaluating Bids and Tenders Real World Sourcing session in both the UK and Dubai. It’s gone down well, and I hope we got people thinking about some of the more complex aspects of tender or bid evaluation and supplier selection. For example, how do you convert “price” or “cost” into a numerical score, so you can compare it with scores for non-price, more qualitative evaluation criteria?

But even when we move away from the cutting edge of procurement theory and practice, there are some issues that aren’t always fully considered. Let’s look at a key point around pre-qualification – the (optional) stage within the overall sourcing process when we determine which suppliers we are going to engage with for the full tendering or bidding element of the process.

Pre-qualification is often carried out through the use of a PQQ (pre-qualification questionnaire), and hence we often talk about the PQQ stage – terminology we will here. In the RWS session, we argued that there are three potential reasons to run a PQQ stage, although they aren’t all necessary or required for every PQQ.

  • It enables us to rule out those suppliers who we don’t want to work with for various reasons, or are simply very unlikely to be able to submit a serious bid – if we’re being harsh, we might say it rules out the chances of ‘stupid’ bids or ‘stupid’ suppliers getting though and wasting our and their own time. .
  • It allows us to reduce the numbers of bidders so we have a manageable number of serious bidders at the second stage.
  • It allows us to look at and ensure suppliers have  basic capability before we get into detailed solutions.

So the PQQ usually has 3 direct purposes and related outputs, although if we don’t want or need to limit the number of bidders, it often only addresses the first and second:

  1. To collect important information about the supplier: registration.
  2. To establish whether the supplier has the basic capability, capacity and financial strength to carry out the contract: qualification.
  3. To compare bidding organisations so a sensible number can be taken forward to tender or final selection: ranking.

It also follows from this that there are three types of question that we may want to ask in PQQs. And this is where sometimes organizations go wrong. It is important to be clear of the purpose behind every question you are asking (and to let the suppliers know too). Is a question being asked just to gain factual information? Or is it a “yes / no” or “in/out” question that could determine in itself whether a supplier stays in the running?

Or is it a question we are going to mark, in order to obtain a ranking between suppliers, which enables us to choose the best (whether that is 3, 6 or 25 suppliers) to take forward to the full tender? If we are going to use the PQQ to choose the best suppliers and eliminate some who might be adequate but aren’t at the top of our ranking, then we need to ask enough questions, and sensible questions, to allow us to do this – without getting into the proverbial 50 page PQQ.

Getting the right blend of these different types of questions, and distinguishing between them clearly, is therefore a key factor to consider if we want to produce a good and effective PQQ document and pre-qualification process.

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Voices (4)

  1. Ian Heptinstall:

    What about the role in “motivating” suppliers to give a great proposal? Too many buyers assume suppliers want to compete to win their business. However a supplier’s past experience may show the buying organisation is a real pain to work with.

    Whilst I can understand the reason to weed out non-serious bidders, is that really a big problem? Are there really that many suppliers with nothing better to do other than submit proposals for work they would be no good at? There is however a real risk that great suppliers are put off by a long winded PQQs.

    You may need the best suppliers more than they need you. Your PQQ is your sales pitch to them…

    1. Dan:

      Its more of a problem getting tenders from firms that haven’t understood the scope of the work, or just want to bid for part of the contract when that isn’t an option

  2. Ian R:

    There is also the yes/no questions which are then weighted….

    Do you comply with the Health & Safety at Wark Act (10%)

    I wonder how much weighting I would get if I didn’t?

  3. Dan:

    Genuine questions asked in a PQQ by a large purchasing consortium (who should know better):

    1. Which of our other frameworks are you a supplier to? (5%)

    2. Which other public sector frameworks are you a supplier to (for information only)

    I had to force them to remove those questions from that particular PQQ, but I got the impression that they were standard questions. It was a real ‘facepalm’ moment for me. I haven’t worked with them since.

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