Invited Bid Two Phase Bid (Prequalification and Invited Bid)
Some of the challenges of open bidding, such as numerous bidders and the question of contractor qualifications, are handled with a two-phase bid process. The first of these phases is prequalification. Private buyers of construction or their consultants normally maintain a working list of suitable contractors for particular types of projects.  Private prequalification tends to be informal, based on regular contact with the industry. The advantage of this approach for many owners and architects is that direct ongoing experience allows a reliable assessment of future performance.  The downside is equally clear; a lack of transparency and a failure to adequately research the market, may leave potentially excellent contractors out of the bid process or may allow contractors to bid who are currently experiencing difficulties.  In public buying processes, a more formal prequalification stage is an important part of identifying companies interested in the work and qualified to execute it.
 
Pre-approved Bidders
An example of an alternative to project-by-project prequalification, is to undertake a periodic process in which contractors are invited to submit qualifications every several years in order to be included on a “vendor of record” list. This approach is analogous to consultants responding periodically to RFPs for standing offer agreements. This type of process is often used for public procurements. In addition, quasi-public organizations with large numbers of similar projects are drawn to this approach. The owners may maintain separate lists for different geographic regions or for different sizes of projects.