Cost of Prequalification: A Pilot Study

Selecting appropriate consultant and contractor is important for successful delivery of construction projects, where prequalification plays a critical role. Such prequalification process is claimed to be creating excessive costs in Scotland, due to higher number of return of prequalification questionnaires (PQQs), as it is required for every project, irrespective of the contract size. However, the claim is not supported by any estimation. This paper aims to fill this gap of information by providing a preliminary estimate of the cost of prequalification process. A pilot study revealed that the cost of prequalification is about one-fifth of the annual turnover of construction industry in Scotland. These figures are believed to be of the right order of magnitude, but accuracy of this figure is somewhat uncertain, because of smaller sample size, diverse nature and scope of construction projects and subjectivity in assessing PQQs. More accurate quantification with larger groups of clients, consultants and contractors is therefore recommended, along with investigating the nature of PQQ assessment with the target to reduce any subjectivity element, identifying suitable factors/criteria and sub-factors/criteria, and developing an appropriate framework for PQQ process to reduce the cost. It is envisaged that a nationwide registration scheme or database of consultants and contractors with information of different type and weight will potentially reduce the cost of prequalification.