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For effective contract administration, two things are most important as noted below:
1.Prequalification of Suppliers/Contractors
2.A well-crafted bid document
The suppliers are to be prequalified based on their technical, financial, manufacturing ability and relevant experience for the job.
Suppliers are to be sourced through Market Research and information gathering through different sources or through open advertisement in the media. Finally, the bid document is distributed to the prequalified suppliers only.
The bid document generally includes the following items/chapters but may vary from organization to organization.
1. Letter of Invitation
2. Instruction to the bidders
3. Schedule of requirement
4. Technical Specifications
5. General Terms and Conditions
6. Special Terms and Conditions
7. Sample contract/Sample PO
8. Sample forms (like performance security, Manufacturer’s warranty)
If the above two processes has been done successfully, the contract administration will be easy and smooth.
In general, contractor prequalification is used to help determine the quantity and type of work a firm is capable of undertaking. Normally the firm's resources, its financial assets, work experience, and its staffing capability must all be identified for it to become prequalified. Some States that do not require prequalification find it necessary to collect some information via a financial statement or some other abbreviated process. These States do not specify the type of work or limit the size of project a firm may bid upon because they feel prequalification may restrict competition unduly. Other States do not prequalify but instead rely on the contractor's ability to provide a performance bond. The FHWA does not require prequalification, but if a STA elects to prequalify contractors, such procedures must not restrict competition.
