Vendor Prequalification Hub

Vendor prequalification (PQ) is the structured process of assessing a supplier's legal, financial, technical, HSE, quality and performance capacity before they are invited to tender. On PIF and giga-projects (NEOM, Diriyah, Red Sea, ROSHN, Qiddiya), PQ is mandatory, non-prequalified vendors cannot bid.

The legal basis is نظام المنافسات والمشتريات الحكومية م/128, which requires government entities to qualify contractors before award. Private giga-developers mirror this with their own PQ regimes aligned with Vision 2030 procurement standards.

A defensible PQ framework rests on six weighted categories. Typical weight ranges shown, adjust per project risk profile:

• Legal & Registration (10–15%): CR, classifications, licences, no debarment.
• Financial Capacity (20–25%): turnover, liquidity ratios, audited financials, bonding capacity.
• Technical Capability (20–25%): relevant experience, key personnel, plant & equipment, methodology.
• HSE Record (15–20%): ISO 45001, LTIFR, fatality history, HSE plan maturity.
• Quality Systems (10–15%): ISO 9001, QC procedures, NCR history, ITP capability.
• Past Performance (15–20%): references, completion record, claim history, client testimonials.

• Commercial Registration (CR), valid, activity covers scope.
• Zakat & Income Tax certificate (شهادة الزكاة)، current.
• GOSI certificate (شهادة التأمينات الاجتماعية)، current.
• VAT registration (شهادة ضريبة القيمة المضافة).
• هيئة المقاولين Saudi Contractors Authority classification, grade matching scope.
• Insurance certificates, CAR/EAR, employer's liability, third-party.
• Audited financial statements, last 3 years.
• Saudization (Nitaqat) certificate, Platinum / High Green preferred.

Use a weighted average model: each criterion scored 1–5, multiplied by its weight, summed to a total out of 100.

Pass thresholds: ≥75 Approve · 60–74 Conditional · <60 Reject.

PQ results feed into a short-list (typically 5–8 vendors per package). Approved vendors enter the Approved Vendor List (AVL). Governance: PQ Committee recommends → Procurement Director endorses → CFO/CEO approves for high-value packages. Maintain a documented audit trail for every decision.

Standard PQ validity is 12–24 months. Trigger re-qualification on: major contract breach, change of ownership, financial deterioration (audit qualification, covenant breach), fatal HSE incident, debarment by any KSA authority, expiry of CR / classification / insurance.

• Accepting outdated documents (expired CR, lapsed insurance).
• Ignoring financial ratios, turnover alone is not capacity.
• No HSE weighting, disastrous on giga-project sites.
• No audit trail, fails نظام المنافسات scrutiny.
• Not aligning with نظام المنافسات م/128 requirements.
• Self-declared references with no verification.