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Supplying Principles and Practices > USPS Supplying Practices Process Step 2: Evaluate Sources > Prequalify Suppliers
Prequalify Suppliers
Prequalification is the process of up-front identification of top-quality suppliers
able to compete for specific types of contract opportunities. Prequalified
suppliers are those whose record of performance in the marketplace, whether
commercial or governmental, demonstrates their ability to perform to
consistently high standards of quality and reliability.
Selection of the right suppliers is critical to the Postal Service's success.
Having the right suppliers augments the Postal Service's ability to deliver
high-quality and innovative services to its customers and reduces operational
risks. Prequalifying suppliers enhances competition, ensures quality
performance, and can also shorten cycle time and strengthen relationships
between the Postal Service and its suppliers.
Suppliers benefit from having a more comprehensive opportunity to
familiarize themselves with the Postal Service's requirements before a
request for proposals (RFP) is issued, which in turns yields lower proposal
preparation costs.
Prequalification may be used:
• On an ongoing basis for commercially available goods or services
purchased routinely
• For an individual purchase or for a series of purchases
The supplier evaluation process is a key means of achieving competitive
advantage and maximum value for money. Supplier-specific performance
evaluation factors such as past performance and supplier capability are
carefully evaluated to determine which suppliers to include on the
prequalified list.
A company or individual that has performed well on previous contracts and
has shown proven results in using supply chain management (SCM)
business practices is likely to do the same on similar contracts in the future.
Including past performance as an evaluation factor helps ensure quality
suppliers. Past performance evaluations should include the following factors:
• Quality - a record of conformance to contract requirements and
standards of good workmanship
• Timeliness of performance - adherence to contract schedules,
including the administrative aspects of performance
• Business relations - a history of being reasonable and
cooperative with customers, a commitment to customer
satisfaction, and of integrity and ethics
• Cost control - a record of forecasting and containing costs on
changes and cost-reimbursement contracts
Emphasis should be placed on comparison with similar contracts held by the
Postal Service when evaluating past performance. If a newly established
supplier cannot provide past performance information, past performance of
the supplier's key personnel on similar projects may be evaluated.
Supplier capability is evaluated to determine a supplier's ability to perform
upon award of a contract. It should be used as a snapshot of the quality and
reliability of that performance. Certain key areas must be considered when
determining a supplier's capability. To be deemed capable, the supplier must:
• Have, or have the ability to obtain, adequate resources to perform
the work (e.g., financial, technical)
• Be able to meet the required or proposed delivery schedule,
considering all existing commitments, including awards pending
• Have a good record of integrity and business ethics
• Have a good quality control program that complies with RFP
requirements
• Have the necessary organization, experience, accounting and
operational controls, technical skills, and production and property
controls
• Have, or have the ability to obtain, the necessary production,
construction, and technical equipment and facilities
• Be otherwise qualified and eligible to receive an award under
applicable laws and regulations
Certain business information must be obtained to determine that a supplier is
capable. Sources of such information include:
• The Postal Service list of debarred and suspended suppliers and
the General Services Administration (GSA) consolidated list of
suppliers debarred, suspended, or declared ineligible
• Whether the Postal Service has decided to decline to accept or
consider proposals from the supplier (see CFR 601.108)
• Records and experience data, including the knowledge of other
Contracting Officers, purchasing specialists, and audit personnel
• The supplier's proposal information, business profile, financial
data, information on production equipment, production data,
questionnaire replies, and personnel information
• Subcontractors, customers, financial institutions, and government
agencies that have done business with the supplier
• Business and trade associations
If the required information and discussions do not provide an adequate basis
for determining capability, the Purchase/SCM Team may conduct a
preliminary prequalification survey. The extent of the survey must be
consistent with the dollar value, complexity, or sensitivity of the purchase and
may include any of the following:
• Data on hand or from other government or commercial sources
• Examination of financial statements and records
• On-site assessment of plant, facilities, workforce, subcontractors,
and other resources to be used in contract performance
Results of the preliminary prequalification survey must be in writing and
included with the capability determination and attached to the contract file.
After the evaluation team has reviewed and analyzed the supplier-specific
information, the best qualified suppliers are placed on the prequalified list.
Some suppliers are considerably more qualified than others, so the
Purchase/SCM Team should prequalify the best suppliers available.
During this phase of the prequalification process, the Contracting Officer
must ensure that:
• The inclusion or exclusion of a particular supplier is based strictly
on business reasons
• Enough suppliers are placed on the list to ensure adequate
competition for subsequent purchases
• Any sensitive business information provided by a supplier is
sufficiently protected from disclosure
All suppliers who responded to the prequalification announcement must be
notified of whether they were included or excluded from the prequalification
list. Debriefings will be available upon request to suppliers who have not
been selected for the list, so they may better prepare for future
prequalification opportunities.
The Purchase/SCM Team should reassess the suppliers included on the
prequalified list periodically to ensure that they remain qualified and reliable.
The Purchase/SCM Team may remove a supplier from the prequalified list
only if the decision is based on good business reasons. The supplier must be
informed of the removal and provided an explanation for the decision.
The Purchase/SCM Team should also consider whether new suppliers should
be included on the list.
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