Conceptually, there are a number of different types of assessments carried out: comparative vs. discrete to a particular transaction; continuous vs. milestone assessment; pre-contract assessment (which incorporates the process of pre-qualification of contractors); assessment during supply and post-supply assessment.
To achieve optimal results, supplier assessment must be carried out using a rigorous methodology, and diagnostic feedback must be provided to the contractor, both to ensure the fairness of the process and to allow it to adjust its performance in accordance with perceived inadequacies. Assessment activity should be properly recorded, so that audit of the process (or any particular instance of assessment) can be carried out, to demonstrate whether that assessment was carried out fairly. As with all other aspects of municipal procurement, assessment must be carried out to the high standards of integrity that the public may rightly expect of a public authority.
The basic objective of any supplier or contractor assessment process is to provide an underpinning for enhancing the quality assurance aspects of the supplier-customer relationship. One basic goal of performance assessment is to encourage a supplier to align its performance with the organizational goals and objectives of the municipality.
There is considerable reason to believe that performance levels improve simply because the supplier realizes that performance is being measured and evaluated. Other reasons for performance evaluation are to lead to more informed decision making about the quality of performance that can be expected of suppliers — both individually and collectively.
Measurement and evaluation can lead to identification of hidden areas of waste and other cost drivers in the supply chain. By eliminating them, a municipality can reduce its order cycle time and possibly be able to reduce inventory levels. Risks can be identified earlier, and proactive steps can be taken at a time when there is good reason to believe that they may lead to problem avoidance. Even if these improvements are never achieved customers are concerned about the quality of service that they are receiving. In many cases, however, an anecdotal approach is taken towards the important question. A more rigorous approach measures supplier and contractor performance against a standardized set of criteria that (as far as possible) are capable of objective measurement. For best results, it is advisable to use experienced assessors, who have a sufficient range of expertise and information available to them to allow them to produce a complete picture of the municipality’s suppliers and contractors.
Municipalities seeking to rely upon past performance must overcome two conflicting realities. First, to have any validity, performance evaluations must be systematic and fair, and based upon explicit criteria of which the contractor has notice. Key considerations include developing a reliable reporting mechanism and creating legitimate performance measures. The contractor must also be allowed to have at least some opportunity to respond to any assessment given. Second, a major problem that many municipalities must overcome in introducing a scheme of contractor performance is to find the worker resources required to make the system work. In principle, a comprehensive system of contractor evaluation is worth the time invested, because a considerable portion of staff time is currently invested in dealing with precisely the type of bush fire that a good system of evaluation will mitigate. Unfortunately, such advice may be likened to the suggestion that the solution for the problems of the poor is for them to save more — it does little to explain how.
An assessment should take into account the scope and nature of products purchased from a supplier, or contractor, the particular requirements to which the contractor was subject, the circumstances in which the supplier was made and any other relevant or extenuating circumstances. A balanced approach to assessment is critical to success.
Stephen Bauld is a government procurement expert and can be reached at stephenbauld@bell.blackberry.net.
Recent Comments
comments for this post are closed