Improving Security of Payment Building and Construction Industry

10. Prequalification Page 119National Public Works Council IncImproving Security of Payment in the Building and Construction Industry• By Subcontractor on Head ContractorNo formal prequalification processes are currently undertaken bySubcontractors on Head Contractors. However, often Subcontractors willundertake a similar informal process to that which the Head Contractorundertakes on them. The Subcontractor will assess any Head Contractorbased upon past experiences from working for that Head Contractor and fromgeneral industry knowledge on the Head Contractor. That is, if theSubcontractors were paid on the last project, then the Head Contractor will besatisfactory to work for on the proposed project. The level of this informalreview may vary when the work is much more competitive.10.3.2 Overseas - SingaporeIn Singapore, a pre-registration system operates for all Contractors providingconstruction services to the public sector. This pre-registration system is aprequalification process which is similar to the approach taken by Australian publicsector Principals. The Singapore prequalification assessment takes into considerationthe following factors:• track record and performance;• financial capacity;• personnel resources;• company status; and• plant and equipment.Singapore operates a tiered registration system based upon areas of activity and forspecific project values. As part of the prequalification assessment Contractors musthave achieved the following:• operate through a corporate structure;• paid up capital of at least 10% of the relevant financial grade; and• net capital worth of at least 10% of the relevant financial grade.10.3.3 Summary of CIDA Prequalification Criteria (1995 Version)The 1995 CIDA criteria are summarised as follows:Head Contractors• Apply to all contracts where the tender value exceeds $5 million