Definition - What does Contractor Prequalification mean?
Contractor pre-qualification is a process by which a bidder on a local government construction project is evaluated in order to determine whether the bidder has the skill, judgment, integrity, sufficient financial resources and the ability required to complete the faithful performance of a contract relating to either construction or repair work.
When used by local government, the potential bidders on a construction project are audited to assess their pre-qualification standing before bids are accepted. Only this bidders who prequalify will be invited to submit a bid.
Safeopedia explains Contractor Prequalification
Pre-qualification laws are set at the state level and, therefore, very between the states. In North Carolina, pre-qualification is prohibited when selecting architects, engineer, surveyors, construction managers, design builders, preliminary designers for design-build bridging projects and private developers for private-public partnership contracts. There is no set minimum contract cost for pre-qualification. Local government is legally obligated to being uniform, consistent and transparent in the application of contractor pre-qualification to all bidders.