Pre-Qualify

Description

Pre-screen potential suppliers against a pre-determined set of sustainability criteria.

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Plan for pre-qualification

Pre-qualification approaches can support sustainable procurement, especially for recurring, large, complex, or high-risk purchases. Firstly, pre-qualification with no limit on the number of qualified suppliers can identify and build a large, sustainable supply pool before solicitation. Secondly, pre-qualification with a limit on the number of qualified suppliers (also known as pre-selection) shortlists the number of suppliers based on minimum sustainable qualification criteria for the procurement concerned. While it can slow processes or limit suppliers, especially in new sectors or innovative categories, its suitability depends on procurement type and speed of supply needs. For public procurement, always check local legal frameworks regarding pre-qualification.

EXAMPLE: Disney avoids sourcing in high-risk regions

Disney has created a predefined list of countries from which its products can be sourced to avoid regions with a high risk of child and forced labour. The list is based on the World Bank Governance index, the US Department of Labour's List of Goods Produced by Child Labor or Forced Labor, and the US Department of State's Trafficking in Persons Report.1 2

Pre-screen suppliers against your minimum sustainability criteria

Methods for pre-screening include designing a supplier questionnaire (SQ) or pre-qualification questionnaire (PQQ) using minimum criteria for supplier values (such as including sustainability in their vision), commitments (such as public sustainability goals & targets), efforts to improve (e.g. policies, processes, certifications such as ISO 14001), and a track record on sustainability (such as demonstrated compliance with environmental and social regulations or demonstrated performance improvements). Request enough information to rank suppliers on more than a yes/no basis where possible. For example, if a pre-qualification criterion is "action plan for net zero by 2050," request their goal, action plans, and track record.3 Clearly and transparently outline the information and evidence you will accept.

EXAMPLE: Patagonia uses a "4-Fold" approach to screening

Patagonia has implemented a "4-fold" approach to new supplier screening based on (1) sourcing, (2) quality, (3) social, and (4) environmental standards. The SER supply chain team, alongside the sourcing and quality teams, all have full veto power over onboarding a new factory. This process screens out suppliers who cannot meet the "4-fold" standards.

Assess suppliers based on pre-qualification submissions

Dedicate a portion of your criteria weighting to environmental and social capabilities and past performance. Assess the credibility of pre-qualification submissions by examining supplier performance claims and commitments—for example, professional qualifications of staff, certifications, past performance, references, and product samples. You can also allow suppliers time to get up to standard. Additional ideas can be found below in EVALUATE and VALIDATE.

EXAMPLE: Selecting suppliers with circular commitment in The Netherlands

University Medical Center Utrecht (UMCU) issued a circular tender for office furniture, using selection criteria assessed supplier commitment to circularity. This included the compatibility of the supplier's vision with UMCU's vision, the degrees to which the supplier has integrated its vision into action and how it sees its role in a circular contract. UMCU also asked for a SMART description of circular results, objectives, and measures to further assess commitment and compatibility. 

EXAMPLE: IKEA supports suppliers in reaching minimum standards 

IWAY is the IKEA code of conduct (CoC) for suppliers, introduced to ensure that IKEA's sustainability ambitions and supply changes would not adversely affect key supplier relationships. It sets clear expectations and ways of working for environmental, social and working conditions, and animal welfare. IWAY encourages openness and honesty about areas that require progress and supports suppliers with continuous improvement by giving them time to get up to the minimum standard.

EXAMPLE: UK Government net zero commitment pre-qualification criterion

The UK government set a sustainability pre-qualification criterion for contracts exceeding a spending threshold of £5 million. To be eligible to bid, suppliers must demonstrate a commitment to net zero emissions by 2050 and have published credible carbon reduction plans for achieving the goal.

Support supplier diversity

Pre-qualification can also help to enable diverse supplier types such as SMEs, local businesses, social enterprises, and Indigenous-owned businesses to participate in the contract. You can adjust functional requirements based on capability (for instance, volume and timing for delivery), make diverse business attributes a minimum requirement and, crucially, ensure the pre-qualification and bidding process is not too long and complicated. Encourage and support sustainable practices through coaching or feedback calls with diverse suppliers who may not fully meet pre-qualification criteria.

EXAMPLE: University uses pre-qualification to accommodate diverse business types 

A Canadian University had one large five-year catering contract. A license to serve alcohol was one of the contract requirements, preventing two desired catering suppliers (an Indigenous caterer and a social enterprise providing supportive employment) from bidding on the contract or catering for small events where alcohol was not required. The University worked around this by using a pre-qualification process to approve these two additional suppliers for catering services for smaller events where alcohol was not served.

Resources
Open Contracting Data Standard: Pre-qualification and Pre-selection  cover

Open Contracting Data Standard: Pre-qualification and Pre-selection

This tool by Open Contracting Partnership introduces the pre-qualification and pre-selection process during single and multi-stage procurement processes. 

Circular Economy Procurement Framework cover

Circular Economy Procurement Framework

This framework by the Ellen MacArthur Foundation outlines circular intervention points at each stage of the procurement cycle.

Pre-Qualify: Stage 3, "Go to Market", covers the need to consider pre-qualification questions and organise a pre-tender briefing on the circular economy before moving forward. 

Tender (RFx): Stage 5 provides a short checklist of questions to guide your selection process.

Self-Assessment Questionnaire on CSR/ Sustainability for Automotive Sector Suppliers cover

Self-Assessment Questionnaire on CSR/ Sustainability for Automotive Sector Suppliers

This supplier self-assessment questionnaire by Drive Sustainability covers human rights, working conditions, health and safety, environment, and business ethics. Most questions are broadly applicable and can be used to inform your own supplier sustainability compliance verification efforts.

WEConnect International Supplier Diversity & Inclusion Resources cover

WEConnect International Supplier Diversity & Inclusion Resources

Supportive resources for supplier diversity, covering ESG, the business case, bias in value chains, best practices, tools & research, regional resources, tier 2, and market information.