Vendor Qualification Form

Vendor qualification is the front-end gate of every procurement process. It determines who is allowed to bid + supply on a project — separating legitimate, capable, reliable vendors from inadequate, fraudulent, or financially weak ones.

The cost of vendor failure is high: - Material supplier bankruptcy mid-project: alternative source needed at premium prices - Sub-contractor walk-out: project delay + workmanship dispute - Quality failure: defective material on site; rework + delay - Statutory non-compliance by vendor: principal employer's liability - Black-listed vendor used: project itself disqualified by client / authority

Under GFR (General Financial Rules) 2017 + CVC Guidelines + ISO 9001:2015 Clause 8.4, every procurement entity must have a formal vendor pre-qualification process. The Vendor Qualification Form is the data-collection instrument.

Qualification serves three purposes: - Statutory compliance (GFR / CVC / ISO 9001 / sector regulators) - Risk mitigation (financial / technical / reputation) - Performance benchmarking (past track record)

For large projects, vendor pools are tiered: - Tier 1: pre-qualified for orders > ₹10 cr (rigorous review) - Tier 2: ₹1-10 cr (standard review) - Tier 3: < ₹1 cr (basic review) - One-time / special: project-specific qualification

Governed by FIDIC Sub-clause 4.4 (Subcontractors) + ISO 9001:2015 Clause 8.4 (Control of Externally Provided Processes) + CPWD Works Manual 2019 + CVC Procurement Guidelines + GFR 2017 Rules 144-160.

Standard 7-section qualification process:

A. Vendor identity verification: - Company name + registration certificate - Year of incorporation (typically minimum 3-5 years for major work) - PAN + GSTIN (verified online) - Aadhaar / Passport of directors - Registered office + branch offices - Key personnel + designations - Authorised signatory + signing limits

B. Financial standing: - Annual turnover (last 3 years): - Minimum: typically 0.5-1.0× of expected single order value - Source: audited financial statements / ITRs / bank certificates - Profitability: net profit in 2 of last 3 years (no consecutive loss years) - Net worth: positive; typically > 25% of expected order value - Banker references: from at least 2 banks; confirm credit limits + repayment history - CIBIL / commercial credit score (where available) - Statutory returns: GST + TDS + EPF + ESI all filed timely - Working capital: adequate for project size

C. Technical capability: - Type of work / materials: aligned with intended scope - Manufacturing / site facilities: visited + verified - Equipment inventory: ownership + capacity verified - Quality certifications: - ISO 9001 (mandatory for most) - ISO 14001 (environment) — preferred - ISO 45001 (OHS) — preferred - BIS / IS approvals for materials (mandatory for safety-critical) - NABL accreditation for testing labs - CRISIL / ICRA Quality Rating (preferred) - Specialised capabilities: relevant to project (e.g., post-tensioning, hyperbaric concrete, etc.) - Skilled workforce: numbers + trades + certifications (ESC, welding certs, etc.) - R&D capability (for specialty work) - Computer-aided design + manufacturing capacity

D. Project experience: - Major projects in last 5 years: name + scope + value + client + completion date - Similar project experience: direct match preferred - Largest single order executed: typically minimum 0.4-0.6× of expected - Reference customer contact details (for verification) - Performance certificates: from past clients (especially for govt + multilateral funded) - Average project duration: relevant to project size

E. Statutory compliance: - EPF registration (Employer Establishment Code) - ESI registration (Employer Code) - BOCW registration (Construction) - Labour License under CLRA Act - GST registration (verified) - TDS / TCS compliance (verified via 26AS) - ISO Certifications: validity within last 12 months - Insurance + BG history: track record - Legal cases: - Pending: nature + amount + jurisdiction - Disposed: outcomes - Arbitration awards (for + against)

F. Past performance: - Quality score from past projects (if available) - Schedule performance (on-time delivery %) - Safety record (LTIR / accident history) - Issues / disputes / penalties with past clients - Black-list status: - CPWD - Railways - State PWDs (each) - PSUs - State Pollution Boards - Indirect tax authorities - Any black-listing typically disqualifies - Awards / recognitions: industry awards as positive signals

G. Qualification decision: - Qualified (Y/N) - Risk rating: Low / Medium / High - Recommended order value cap: based on net worth + experience - Validity period: typically 12-24 months - Conditions (if any): e.g., site visit before each order; supervisor consent required; additional security - Approver + Date - Periodic re-qualification: typically annual

Site verification for tier-1 vendors: - Physical visit to manufacturing / site facility - Verification of equipment + workforce - Quality system audit - Reference call confirmations - Financial document authenticity check

1. Documentation taken at face value — no physical verification; later discovers vendor doesn't have claimed facilities; project blocked.

2. Single-person review — qualification by sole procurement officer; conflict of interest; favouritism.

3. No reference call — past customer references in form but not actually contacted; bad-credit history hidden.

4. Bank reference letters faked — provided letters but bank denies issuing on verification.

5. GST + TDS check skipped — vendor has tax filing issues; later legal complications.

6. Black-list databases not checked — vendor black-listed by another govt dept; not flagged; project later disqualified.

7. Turnover requirement gamed — vendor uses subsidiary / sister concern's turnover; not own.

8. Financial year-end manipulation — turnover boosted by year-end transactions; not reflective of operating capacity.

9. No site visit for major orders — qualification on paper; reality on ground different.

10. ISO certifications expired — certifications cited but actually expired; not verified.

11. Joint Venture qualification confusion — JV partner's experience claimed but JV not formed; clarity needed.

12. No technical evaluation — only financial review; technical capability inadequate.

13. Past performance ignored — same vendor under-performed earlier; re-qualified without conditions.

14. Anti-corruption checks missed — vendor's directors are family of procurement official; conflict.

15. No annual re-qualification — qualification done at start; financial / capability degradation over time; not re-assessed.

16. Sub-contractor's sub-contractor unqualified — main contractor qualifies; passes work through layers; final tier not qualified.

17. Insurance / BG not project-specific — vendor's overall policies cited; project-specific coverage not arranged.

18. Statutory case status outdated — "no pending cases" at qualification; new case filed; not updated.

Companion PMC formats: - Procurement Register (PMC-PRC-REG-009) — PR / PO management - Material Expediting Log (PMC-PRC-LOG-009) — vendor performance - Item Rate Analysis (PMC-PRC-FRM-011) — rate basis - Pre-Bid Query Register (FMT-TND-009) — pre-bid clarifications - Bid Comparison Statement (FMT-TND-010) - Vendor + Sub-contractor Empanelment (FMT-TND-018) - Subcontractor Bill Tracker (PMC-BIL-LOG-003) - Material Test Report (FMT-STR-005) — material QA

Standards + references: - GFR (General Financial Rules) 2017 — Rules 144-160 on procurement - CVC Procurement Guidelines — Anti-corruption + transparency - CPWD Works Manual 2019 — Vendor pre-qualification procedures - Manual for Procurement of Works 2022 — MoF, GoI - FIDIC Sub-clause 4.4 — Subcontractors - ISO 9001:2015 Clause 8.4 — Control of externally provided processes - ISO 22301 — Business Continuity (for vendor risk) - GeM (Government e-Marketplace) Guidelines — Vendor on-boarding for govt purchases - MSME Act 2006 — Reservation + preference for MSMEs - Companies Act 2013 — Related party transaction (Sec 188) - PMI PMBOK 7th Ed — Procurement Management Knowledge Area