How to Choose a Contractor?

Today, we will discuss how to choose a contractor.

This process can be divided into two major stages: pre-qualification, where we filter out the weakest candidates, and technical evaluation, which helps determine the tender winner.

Pre-qualification Questionnaire

The questions in the questionnaire are fairly general but help weed out the weakest candidates. The Client receives general information about the organization's HSE Management System, allowing them to assess the candidate's potential capabilities in this area.

After the questionnaire, our list of contractors is narrowed down, but the tender winner has not yet been identified, and it is necessary to proceed to the next stage – determining the winner.

For this purpose, a so-called technical matrix is developed. The technical matrix includes the most significant questions for the contract, i.e., the applicant's ability to implement the proposed contract safely, with quality, and within acceptable timeframes and costs. Thus, the technical matrix is unique to each contract. This is an opportunity for the Client to ensure that the tender applicant adequately reflects the volume of resources required to ensure effective risk management and will use an integrated approach during contract implementation.

Depending on the significance of the contract and the presence of high risks, the matrix may include disqualifying questions. Such questions can come from any area of the contract: safety, conditions, management systems. If an acceptable answer is not provided to such a question, the applicant is disqualified immediately.

For example:

Provide evidence that the contractor has the capability to provide:

• a heated production base of at least 1,000 m2 (for work, tool storage, maintenance, repairs, etc.)
• suitable office space designed for at least 10 people:

A scoring or percentage system is used for technical evaluation criteria; safety issues should account for at least 25% of the total score (if the contract is significant in terms of risks/cost/timing).

The blocks listed below are not the only ones possible.

HSE Block

The main difficulty of this block is to formulate specific questions in a way that does not duplicate the pre-qualification questionnaire but complements it. For example, if you already requested a risk register for the contract work during pre-qualification, there is no point in requesting the register again.

If you requested at the technical evaluation stage: provide confirmation that 100% of the declared personnel have training for working at heights, you must understand that the applicant may either provide names of random employees who have certificates but will not go to the Client's project, or will buy/forge the declared certificates specifically for the tender.

Possible questions:

• Provide a risk register for the work under the planned subcontract
• Provide 3 emergency response drill reports from the last 2 years.
• Develop an HSE plan for the declared scope of work / project, taking into account the specifics of the work site
• Provide a personnel training matrix for the declared scope of work.
• Program / procedure for developing motivation and initiatives in HSE

Work Experience on the Declared Project Block:

Possible questions:

• Provide information on your company's level of presence in the service market of this region
• Describe your company's experience in performing ___________ works
• Provide copies of qualification documents and resumes of employees
• Provide 2 examples of a Work Execution Plan for performing _______ over the last 2 years

Work Execution and Quality Management System Block:

Possible questions:

• Potential subcontractors with the distribution of the scope of work.
• Percentage of subcontractors involved compared to own resources.
• Provide a list of available equipment for performing the declared work, including inspection tools and instruments (with a valid calibration certificate).
• Provide a list of all QMS procedures and technological procedures necessary to perform the declared work.

An evaluation criterion is created for each question. The evaluation criterion can be from 0 to 3 or from 0 to 5; each criterion must have a description for a clear understanding by the evaluators.

For example, the evaluation criterion for the question "Provide a personnel training matrix for the declared scope of work, including subcontractors."

0 - Training matrix not provided

1 - A general training matrix not related to the specific contract is provided

2 - A training matrix for the specific contract is provided, excluding subcontractors

3 - A training matrix is provided that fully satisfies the specifics of the contract and subcontractors

The applicant with the highest score becomes the tender winner. Unfortunately, the winner does not always show the ideal results that the Client would like to see. In this case, the Client's management, including those responsible for the contract, decide to hire the contractor and develop an action plan and costs to eliminate the safety gaps identified during the pre-qualification. Such a decision on additional contract costs can be made if the contract is long-term and the additional costs are justified.

Additional contract expenses may include, but are not limited to:

• additional on-site supervision by the Client's forces
• hiring additional supervisors on the Client's side for a specific contract,
• training sessions
• development of fundamental documents for the contractor by the Client's personnel
• equipment / vehicles,
• support / inspections / audits of the subcontractor by the Client.
• meetings / consultations by the Client's management

The activities listed above are much more numerous and are part of a large and long-term program that can be titled "Supplier / Contractor / Counterparty Development Program." Any development activities must be included in the contract and the HSE management plan and regularly monitored at all levels.

Evaluating a tender applicant is a rather complex issue that must be approached with full attention and professionalism. The contractors you choose will become your partners, and the success of your project, and perhaps your company, will depend on your close joint work.