The document discusses pre-qualification of contractors for construction projects. It describes the typical stages of pre-qualification which include inviting applicants, selecting tenders, evaluating applicants based on criteria like experience, equipment, finances, and litigation history, selecting a suitable applicant, and forming a contract. Key criteria for evaluating applicants are also explained such as financial capacity, experience, technical capacity, and litigation history. An example matrix for analyzing and selecting contractors is provided. The use of standard bidding documents from ICTAD is also discussed. Lump sum contracts are described as being dependent on firm quantities and specifications in the bidding documents. Risks to contractors from price fluctuations in lump sum contracts are noted.

1. [TYPE THE COMPANY NAME]
PRE-CONTRACT

2. 1. PRE QUALIFICATION
1.1
Construction industry is the one of the most important industry in the world. It consist with
number of team and number of stages according to the RIBA plan of work 2013 we can find 8
different stages as a QS we have to work in the every stages. Under the eight stages the one of
most important stage is selecting the contractor and suppliers; it comes under pre construction
period- tender action.
The successful of a site depend on the selection of the contractor with the capabilities to achieve
the output of the project where the prequalification activity takes an important role in this the
purpose for the prequalification is to find out the suitable applicant from the tendering
procedures. The prequalification activity has some identified stages they are
1. Invitation to pre-qualification - In this stage the client publish the
requirement using the bidding method (competitive or negotiate) with the intention to
select a suitable contractor. The invitation normally call through the newspaper
advertisement
2. Tender selection stage - In this stage the process will take to select the
correct tender specially consider the
 Way of the application fills
 Completeness of applications
 Legal consideration – Whether the organization have any legal problems or
acceptance
 Whether have the eligible to apply
3. Evaluate the criteria - After select the qualified tender documents from the
applications the suitable contractor will select for the project according to the requirement
criteria such as
 General experience
 Personnel capabilities
 Equipment capabilities
 Financial position
 Litigation history
Normally this will consider according to the requirement criteria which mention in the
paper advertisement.
4. Select the suitable applicant - After analyze the applicants who pass in the
preliminary examination the evaluate criteria will check and the applicant who satisfy the
client requirement will select and inform through the “letter of acceptance” to the
selected particular and also the submission of evaluation reports to Procuring Entity also
will happen in the stage

3. 5. Contract will form - This stage identifies as the last stage in the pre-
qualification activities after the response from the selected applicant the agreement will
sign between the two parties and the construction process will start.
• Invitation to
prequalification
Receive appicant
through
advertisement
• Select the tenders
according to the
basic regurement
if it
achieve
• Evaluate the
requirement
criteria
if it
achieve
• Select the
suitable
appicant
submission
of procuring
entity • Sign the
contract
start the
work

4. 1.2
During the selection of the suitable applicants from the submission the client has to select the
suitable contractor this suitable bidder will select through the following criteria
 Financial Capacity - The successful of the project depend on the finance,
so the main criteria are the financial capacity of the contractor because the project amount
will not pay at once. in that situation the contractor must have the capable to do the
project with his own resources normally the financial capacity will check through the
financial ratios , profit of previous projects and the working capital and also using the
cash flow statement.

 Personal capacity and experience - The mega projects and some specific projects are
not possible for the every contractor; even though they have the financial capacity
additionally they need the experience and the personal capacity. The experience tells
about the previous projects similar to the project, for the hospital project the contractor
should have the experience of hospital project earlier. Under the personal capacity it
analyze about the management capable of the organization because the large projects
depend on the effective management, also the license from the accepted authority such
as NCASL / ICTAD registration also will check.
 Technical Capacity - The other important factor is the technical capacity it
will discuss through the following criteria Availability of the machinery and the
availability of the skillful staffs specially some projects the big part of the project cost
will allocate for the machineries nearly 20% of the total cost will spend for machineries
and also the skill full labor need for some specific installations especially the output of
the project with the client’s expectation with in the period of time depend on the skills of
the labor
 Litigation history - The litigation history used to identify the illegal issues of
the organization, because for the construction the law is important so the organization
should legally ace[ted and free from legal problems.

5. 1.3
According the advertisement which was published by the department of customs eight bidders
requested for the pre-qualification
Annex A - MATRIX ANALYSIS FOR SELECTION OF CONTACTORS
According to the matrix chart I allocate the following project weight percentage
 Financial position - According to the advertisement the requirement of the client
mention financial statements of the company for the last 5 years through the Working Capital
and also mention a single building project for more than Rs. 500.0 Million within the last
5 years this prove that the upcoming building cost is more than 500.0 Million so I gave
30% for the financial position of the applicants
 Previous Experience - This building for an Customs HQ so the building will differ
from the other buildings specially security and other protection installations and also in
the advertisement itself mention that A single building project for more than Rs. 500.0
Million within the last 5 years according to those factors I allocate 20% for the
experience.
 Technical expertise and materials - In-house staff strength and equipment availability for
the following activities, in mechanical installations, in fire fighting and fire protection systems,
in lift installations ,in communication installations ,CCTV access control system and building
management system, in Water treatment system so according to this the skillful staffs as well as
the high efficient materials will need for this project due to that I allocate 25% for the staffs skills
and the machineries.
 Management ability - This is the government project so the involvement of the client in
the works is less and the separate team allocate for supervise the job so if the contractor
has good management the client’s management team can easily control and also in the
advertisement itself mention Grade M1 registration in building construction specially
with the institute of construction training and development Sri Lanka (ICTAD) or a joint
venture where the lead partner is a main construction according to that I allocated 15%for
this criteria.
 Workmanship and the safety - According my analyze I allocated 10% for the
workmanship and the safety because correct safety procedure play an important role the
main consideration gives to healthy and safety in every projects. it protect to the
workmen from the hazards because of the safety issues the project may face unavoidable
problem from different sites. in this project it tells about this is a government project so
they will consider the safety of the workman as an important factor.
After analyze the factor the Applicant G is suitable for this contract which have the high score
90.6

6. 2.
PRE QUALIFICATION OF CONTRACTORS
The world-branded hotelchain grouphere byinvites experienced contractors
with ICTAD registration and above to construct a new five star hotel in Sri
Lanka, the old industrial building located in site premises and need to
demolished as part of this contract
Interested parties shallrespond with following details
 ICTAD Registration
 Experience in hotel projectwhich completed in two years(at
least five years)
 In house staff and the Equipmentavailability
 Financialstatementof the companyforlastfive years (average
annualturnovermore than Rs200 million for last three years)
Complete applicationsshallbe delivered on or before 09.59 am
10th
July 2017 in a sealed envelope marked “pre qualificationfor
the five star hotel projects “to the following addresses
The CEO
World – branded hotel chain groups
Colombo 07

7. 2.2
The SBD is the document which used in the construction industry for all kind of procurements as
a guidance or standard and it is a document accepted by the society which is developed by the
institute of construction training and development (ICTAD). This document mainly used for the
measure and pay contracts.
As stated on SBD /02 (2007),
The applicability of this document vary according the document number
ICTAD/SBD/03 - Works contracts up to Rs.10 million
ICTAD/SBD/01 - Contracts between Rs.10 million to Rs.100 million
Used for works for higher values, which are not of a complex
nature
ICTAD/SBD/02 - Major contracts over Rs 100 million and for contracts of a lesser
value, which are of a complex nature.
ICTAD/SBD/04 - works for design and build contracts
ICTAD/SBD/06 - Works contracts not exceeding Rs 5 million when shopping
procedure is used
ICTAD/SBD/07 - procuring construction related plant such as central air-
conditioning system, elevators, and large generators (p.vi).

8. 2.3
According to The SBD Second Edition, it consist with two volumes and the each volumes
consist with their sections
As stated SBD/02 (2007),
“Volume 01:
a) Section 1 – Instruction to Bidders
b) Section 3 – Conditions of Contracts
c) Section 5 – Standard Forms (Contract)
Volume 02:
a) Invitation for Bids
b) Section 2 – Bidding Data
c) Section 4 – Contract Data
d) Section 6 – Specifications
e) Section 7 – Form of Bid
f) Section 8 – Bill of Quantities
g) Section 9 – schedules
h) Section 10 – Drawings
i) Section 11 – Standard Forms (Bid)” (p.v).
In the volume 01 under the section 5 which consist about the standard forms (contract)
 Letter of acceptance - Letter send to the selected applicant
 Agreement - The contract between the two parties
 Performance security - After get the letter acceptance within 14 days provide to
performance amount according to the bidding data
 Advance payment security - after submit the performance security within 14 days
guarantee for the 20% of the project cost
 Retention money guarantee

9. 2.4 According to the SBD Second Edition under the section one – instruction to bidders in
that the part D – Submission of bids mention that the bidders must prepare two document one is
a original and the other one is the copy both documents have to send in separate envelopes in that
the original document outer envelope has to mention as “ ORIGINAL” and sealed in the other
envelope the copy document will insert and the outer cover has to mention as “COPY” and also
when they open the bid first they open the document mention as “ORIGINAL” if any documents
missed in this only the document which mention as “COPY” will open.
SBD II (2007) mentions that
“The envelop marked as “ORGINAL” consist with
• Duly filled and signed form of bid
• Bid security
• Power of attorney for the signatory to the Bid
• Section 2 – Bidding Data
• Section 4 – Contract Data
• Section 6 – Specifications
• Section 8 – Priced Bills of Quantities
• Section 9 – Duly filled schedules
• Section 10 – Drawings
Envelop marked as “Copy” consists with
• Duly filled and signed form of bid
• Section 8 – Priced Bills of Quantities
• Section 9 – Duly filled schedules” (p.16).

10. 2.5
Lump sum contract is the most common contract which is the one of the contractual arrangement
on the traditional procurement path. The lump sum contract mention as fixed price contract so
the contractor accept for a fixed price before start the project.
The lump sum depends on
 Firm quantities
 Drawing and specifications
The lump sum have the long period in the pre-contract period specially after complete the total
design only the construction process will start so a proper BOQ will prepare in the lump sum
normally is prepared by the contractor QS
A BOQ consist with
 Item No
 Description
 Quantity
 Unit
 Rate
 Amount
Under the above contents the quantity and rate take an important part in the lump sum because
lump sum is the fixed price to fix the price we have to identify the quantities correctly for the
quantities only rate will apply so the both affect the final amount of the project.
The main source in the lump sum is the drawing so the quantity surveyor calculate the quantity
for the each elements according to the drawing and the market price analyze for the each
elements and rate identified finally the total amount calculate and that amount will fixed as the
lump sum amount before start the contract.

11. 2.6 The lump sum contracts depend on the quantities and the prices. The contractor is the
person who agree and start work for a define amount. Basically in the market the price never
firm it will fluctuate so the contractor will face a big risk in the lump sum contract. The most of
the times the lump sum contract affect the contractors especially during the lump sum prepare
according to the drawing and specification the quantity and the rate are important parts in that.
The quantities and the amount fix earlier and the most of the contractor using some bid tactics to
gain the project ,but under lump sum if the contractor did any mistakes in quantities it will cause
an big damage for the profit and most of the times lead to lost of the project.
The contractor Quantity surveyors have to take more consideration to measure the quantity and
the price. Specially have to analyze the drawing and specification carefully before prepares the
BOQ.
The lump sum contractual arrangement will not allow for the changes or the variation in the price
after the project complete other than allow for the taxes with the instruction of engineer. it prove
that the chances to damage for contractor is more in the lump sum in different factors such as
price fluctuation , weather , availability of materials so he have to take more consideration on the
BOQ otherwise the contractor has to face a big lost in the project.

12. REFERENCES
Designing Building. (2017, March 10). Retrieved June 30, 2017, from WIKI:
https://www.designingbuildings.co.uk/wiki/lump_sum_contracts
ICTAD. (2007). SBD/02.
Mark ,Robinson & Langdon, D. (2007). procurement tendering and contract administration.
Blackwell.