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Rating the capability and performance of suppliers

Stephen Bauld
Rating the capability and performance of suppliers

It is always beneficial for municipalities to have in place a systematic approach towards rating the capability and performance of suppliers.

I have always encouraged government agencies to have a settled business plan directed towards improving the efficiency or effectiveness of their procurement process.

Unfortunately, over the years I have seen many attempts to have a standard vendor performance program in place, but many fall short of collective objectives. These agreements are only effective when they are not written in a one-sided manner. Mechanisms of this nature are business tools that are intended to keep problems in both the public and private sectors to a bare minimum.

While no system of public procurement will ever be fail safe, it is obviously essential for such problems to be minimized. The large number of problematic cases that are made public each year leave considerable room for doubt as to whether proper measures are in place in relation to municipal procurement. It is always better for municipalities to have a standard practice to follow then to have to defend themselves in the press without one.

As we all know newspaper and other on-the-record accounts detailing misuse of public funds are often sensationalized to the point that they bear no resemblance to the truth.

On the other hand, some true stories are so outrageous that it is hard to believe they actually happened. Therefore, having a formal policy to evaluate the process of vendor performance as well as the award process can be critical in explaining how decisions were made in the first place.

In my experience, when I have investigated accusations of wrongdoing I usually find any rational person put in the same circumstances as a decision-maker at the time in question would have come to much the same decision. By having a formal written process for all evaluation aspects of awarding contracts would be beneficial. This also includes vendor performance issues after the contract award.

For instance, across the country municipal governments are forced on a near routine basis to compromise dubious claims based on various principles of the Canadian law of tender for the simple reason that it is too costly in terms of demands on staff and the cost of legal services to do otherwise.

The problem with municipal and other public procurement does not lie in individual action and the ability of individual staff. Rather, the problem is systemic in nature and the law of tender as it has evolved in Canada is part of that system.

Systemic problems are far more difficult to solve than those that relate to individual cases of abuse. When problems are caused, or allowed to happen by individuals, the solution is simple: get rid of the people concerned.

When problems are systemic, the solution is to change the system. But how, where and in what way? Systemic problems are the very things that the political process is not well suited to remedy.

Solving them requires bipartisanship, a lot of research and analysis and requires decision-makers to learn boring factual details and then undertake hard thinking to put facts into meaningful context.

The importance of dealing with inefficiency in procurement systems becomes clear when one considers the implications of poor purchasing decisions to the taxpayer. It is axiomatic high costs of government procurement must be met out of tax dollars. The level of expenditure differs from one municipality to another.

All this is related to the capability and performance of municipal suppliers from day one. Governments identifying top suppliers for both goods and services and construction is paramount to the success of every project.

A universal system needs to be created to be able to weed out poor performing vendors and acknowledge the good ones.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com.

Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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