Pre-Qualifying Vendors Before You Share the Full RFP

The pre qualification questionnaire is short (typically 2 to 4 pages) and intentionally focused on disqualifying. Pass / fail criteria on the items that would otherwise become deal breakers after the full RFP has been answered. The questionnaire covers:

Vendor financial stability matters because vendor insolvency mid engagement is the worst possible outcome. The disengagement is expensive, the data and IP recovery is fraught, the replacement is rushed. Three independent data sources should triangulate the picture rather than relying on vendor self disclosure alone.

1. Audited financial statements. Past 2 to 3 years. Look for revenue growth, profitability trend, current ratio (current assets / current liabilities; 1.5+ is healthy), and net cash position. For private companies that resist disclosure, request a summary letter from the auditor confirming the firm is a going concern without qualification. For very small vendors, this may not be feasible; use other sources.
2. Dun & Bradstreet Paydex score. Industry benchmark for payment history with the vendor's own suppliers. Paydex 80+ indicates the vendor pays on time; below 60 indicates payment problems that often precede liquidity crises. The D&B report is widely accepted as an independent reference.
3. Independent credit rating. For vendors with public credit ratings (S&P, Moody's, Fitch), the rating provides a third-party assessment of default risk. Investment-grade ratings (BBB- / Baa3 or higher) are generally low-risk; speculative-grade ratings warrant deeper review.
4. References on financial reliability. For smaller vendors without audited financials or D&B ratings, references should be asked specifically about vendor financial reliability: have invoices been honoured, have promised resources been delivered, have there been signals of stress in the engagement.

Reference checks are usually conducted poorly: an evaluator schedules a 30 minute call with the vendor's most enthusiastic customer and walks away reassured. The reference check protocol is to talk to multiple references including ex clients, ask the same six questions of each, and triangulate the answers.

The six question reference check (20 minutes total):

1. Describe the scope you engaged the vendor for. Confirms that the reference is for comparable work, not a generic positive reference.
2. Did they deliver to scope, on time, on budget. Three sub questions. Most references will hedge on at least one; hedging is more informative than glowing affirmation.
3. What did they do better than you expected. Surfaces genuine strengths.
4. What did they do worse than you expected. The most revealing question. References coached to be positive struggle here; answers like everything was great or I cannot think of anything are themselves data. Probe for specifics.
5. Would you hire them again, and if so for what kind of work. The hire again question is binary. The for what kind of work follow up reveals where the vendor is strong vs marginal.
6. Is there anything you would change about how the relationship was structured. Surfaces lessons the client can apply to the engagement letter and statement of work.

Two to three current client references plus one to two ex client references. The ex client references are often the hardest to get; vendors that resist providing any are signalling something worth noting. NIGP's procurement reference framework treats reference checks as a mandatory step for spend above defined thresholds; see NIGP resources for the standard protocols.