Prequalifying a Contractor: What the Questionnaire Fails to Test

A prequalification questionnaire collects documents. Whether the contractor can deliver your particular project is a different question, and these are the gaps it usually leaves.

Prequalification exists to remove bidders who cannot deliver before you spend weeks evaluating their prices. Most questionnaires do that badly, because they test the existence of the company rather than its capacity to take on your job now. The mistakes below all produce a clean prequalification score followed by an avoidable failure on site.

Why these keep happening

The questionnaire is usually inherited and expanded. Each failure on a past project adds a question, so the document grows into a long request for certificates, registrations and reference lists that any established company can satisfy. What it rarely asks is whether the people who delivered those references are available, whether the current workload leaves room for your project and whether the company has ever done your specific type of work at your scale. Those three questions do most of the filtering, and they are the ones a document request cannot answer on its own.

1. Treating registration and classification as a capability test

Registration with the Ministry of Commerce, membership of the Saudi Contractors Authority and a classification grade confirm that a company exists, is permitted to work and has satisfied the criteria of a grading system. None of that tells you whether it can build your building. A grade is an eligibility threshold, not a quality rating.

• Avoid it by: Use registration and classification as a pass or fail gate, then score capability separately on evidence specific to your project type and scale.
• Proof it is closed: Your scoring matrix shows zero weighting for registration and real weighting for relevant completed work.

What it costs you: A contractor that clears every administrative hurdle and has never built your asset type.

2. Accepting a reference list without testing the team

Reference projects are delivered by individuals. If the project director, the planner and the site agent who ran those jobs have left or are committed elsewhere, the references describe a capability the company no longer has available to you. Companies do not volunteer this, and the questionnaire rarely asks.

• Avoid it by: Require named individuals with curricula vitae for the key posts, ask which of your reference projects each person worked on, and make the commitment contractual.
• Proof it is closed: The organisation chart in the bid names people who appear in the reference projects, and the contract restricts their replacement.

What it costs you: A strong corporate history and a weak team on your site, discovered in the second month.

3. Ignoring current workload and committed capacity

A contractor with the right experience and no spare capacity will still take your job, because turnover is how contracting businesses survive. The consequence is a thin site team, slow procurement and a programme that drifts from the first month while the company services a larger project elsewhere.

• Avoid it by: Ask for current and committed order book, the value of work completing in the next six months and the resources assigned to each live project.
• Proof it is closed: A workload declaration that reconciles with the proposed resource histogram for your project.

What it costs you: Delay that is nobody specific fault and very hard to prove, in a period when the site is simply under resourced.

4. Reading accounts for solvency and nothing else

A profit figure says little about whether a contractor can fund your project. What matters is working capital, the relationship between turnover and the size of your contract, how the business is financed and how long it takes to pay its subcontractors. A company carrying a large loss on another contract can be solvent on paper and unable to pay for your materials.

• Avoid it by: Review three years of accounts for working capital trend and turnover concentration, and ask directly how the contractor will fund the first two months before the first payment arrives.
• Proof it is closed: A written funding explanation for the pre payment period, plus a cash flow forecast consistent with your payment terms.

What it costs you: Slow procurement, subcontractors leaving site and eventually a renegotiation you did not plan for.

5. Not asking how the work will actually be resourced

Many contractors subcontract most trades. That is normal and often efficient, but it changes what you are buying: you are buying management rather than execution. If you never ask which packages are self delivered and which are subcontracted, you cannot assess whether the management capacity exists.

• Avoid it by: Require a package by package statement of self delivery against subcontracting, with the intended subcontractors named for the critical packages.
• Proof it is closed: A subcontract strategy table submitted at prequalification and revisited at tender.

What it costs you: Coordination failures between packages, and a main contractor that passes every technical question down the chain.

6. Skipping compliance on labour and site obligations

A contractor labour position affects your project directly. Workforce arrangements, worker registration, accommodation and payroll obligations are administered through bodies such as Qiwa, GOSI and the municipality, and a contractor with problems in that area will have problems delivering labour to your site. The requirements in this area change periodically and need confirming at the time.

• Avoid it by: Ask for the contractor own statement of its compliance position and how it resources labour, and verify what can be verified through the relevant authorities.
• Proof it is closed: A compliance declaration on file, with the contractor confirming it will maintain the position for the duration of the works.

What it costs you: Sudden loss of workforce, stop notices or a site that cannot be staffed when it matters.

7. Never visiting a live site

A questionnaire cannot show you how a company works. One unannounced visit to a contractor live site tells you about housekeeping, safety discipline, supervision ratios, material protection and whether the site team can explain the programme without calling the office. Reference project visits to finished buildings show only the result.

• Avoid it by: Make a visit to a current site a mandatory step for every shortlisted contractor, with a written assessment against fixed criteria.
• Proof it is closed: A completed site visit report for each shortlisted bidder, signed by the person who attended.

What it costs you: Awarding to a company whose working methods you have never seen.

A short check before you sign

• Registration and classification are treated as a gate, with capability scored separately.
• Key personnel are named, their relevant project history is verified and their replacement is restricted by contract.
• Current and committed workload has been declared and reconciles with the proposed resourcing.
• Three years of accounts have been reviewed for working capital, not just for profit.
• The subcontract strategy for critical packages is on paper.
• Every shortlisted contractor has had a live site visited and written up.

If it has already happened

If you have already appointed a contractor that prequalification should have filtered out, stop assessing the company and start assessing the specific deficiency. If the problem is the team, use the contract to require a named replacement and set a date. If it is capacity, agree a resource histogram with weekly reporting against it. If it is cash, tighten the valuation cycle so that payment is prompt and verified, and ask for evidence that subcontractors are being paid. If it is competence in a critical package, reach agreement on a specialist subcontractor you approve. Legal routes exist if those steps fail, and the point to take advice from a licensed adviser is before you issue any notice, not after.

Domira builds and supervises projects across Saudi Arabia, and the commercial discipline above is how its projects stay inside their budget and their programme. Send the drawings, the contract or the site and Domira will tell you where the risk actually sits.