Effective procurement policies are important from a development perspective. Prequalification procurement is a risk management strategy by procuring entities to reduce suppliers’ related risks such as failure to deliver supplies on time, health and safety needs, litigation costs due to failure or cancelation of tender, suppliers’ insolvency, technical competences as well as resource capabilities. Prequalification procurement is important especially in costly procurement and sensitive tenders. The main objectives of carrying out prequalification procurement are to remove potential bidders that are not capable of meeting contract requirements; short list those that meet basic requirements for the bid and remove unsuitable bidders on legal basis. Pre-qualification of suppliers ensures that organizations are able to optimize returns while cutting costs, enhancing competition and accountability, fostering the culture of fair play in the business industry and eradicating corruption. In this regard, therefore, the study of the role of pre-qualification of suppliers on organization performance is important.This study seeks to establish the role of procurement pre-qualification on the performance of selected public institutions in Nairobi County. These are: KNH, CAK, KENGEN, KeNHA and CPF. Using a stratified and simple random sampling, a sample size of 103 was drawn from a target population of 140 employees in departments of procurement of the respective companies. The researcher used structured questionnaires to interview the respondents and responses analyzed by descriptive statistics. Results also revealed that majority of the respondents were in support that prequalification of suppliers minimizes the cost incurred in screening and analyzing bids tendered however majority thought that prequalification was not in any way more cost effective when compared with open tendering. The study recommends measures to re-enforce the existing mechanisms and practices for better selection of suppliers. They should strive to strengthen their procurement planning and contract monitoring & control systems so as to ensure successful procurement prequalification. This way, their objectives of improved service delivery, reduced cost and quality will be realized.

Key Words: Procurement, Pre-qualification, Performance

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