Prequalification

An effective way to accomplish these goals is using a prequalification process. The idea is to follow a structured routine that guides the sponsor through the preparation of the ranking material. Once this is done, the proposal or business case must pass certain tests before the project can get on the candidate list.

As part of the development of the PPM process, the PMO creates a prequalification template. This template has a section for each subject area of the proposal to be considered with questions to guide the sponsor's responses. Periodically (in conjunction with the strategic planning cycle) the prequalification template is updated with the current ranking and selection criteria to reflect the latest thinking relative to strategic buckets, risk philosophy, and financial and resource constraints.

As each project is conceived, a proposal (or business case) is prepared that will include the response to the current prequalification questionnaire. The first objective is one of self-regulation. It is expected that many inappropriate proposals will be withdrawn before being issued because the sponsor will recognize that it doesn't meet the acceptance criteria, or it will be ranked so low as not to make the cut.

At this juncture, projects should be withdrawn for these reasons:

• Not in line with available resources, mission, or other criteria

• Not sound politically, socially, or for business relationships

• Feasible technologically but not economically

• Feasible economically but not technologically

• Involve excessive risk or are not within the risk culture

The prequalification criteria should not be rigid. However, if there are exceptions, the business case must present arguments to pass the prequalification criteria.

Because the prequalification criteria have been published and distributed, sponsors are obligated to address potential issues early. The result is a reduction in the number of bad proposals.

Proposals that are not withdrawn are now reviewed within the PMO for pass-fail against prequalification criteria. The PMO may reject proposals that do not meet the criteria or may pass on recommendations to the GC. The project sponsor may appeal the PMO decision to the GC. A review team will judge whether anyone has a reason to override the prequalification criteria for a particular proposal. They will have to convince others on the committee. The committee may recommend modifications to the proposed project to allow it to pass the prequalification test.

Once the proposed project passes the prequalification test, it is placed in the hopper for the ranking review, the next step. Failed proposals may be fully withdrawn or placed in a second-tier group as backups.

This prequalification routine will save the time and effort to rank proposed projects that don't really have a chance. It will also help to make the number of proposed projects more manageable. Figure 3.2-1 is a flow diagram of the prequalification process within a PPM system.

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