As promised in our 2018 Year in Review, we will delve into some of the new and innovative procurement strategies that are being implemented by your colleagues across the country. This is by no means an exhaustive list. We know that many of you are exploring new approaches to enhance the value received from your procurements, and we invite you to contact us with your own examples so that we can share the information with other procurement professionals across the country. Why reinvent the wheel when you can learn valuable lessons and new approaches that have been tested in the market?
We know that many of you are employing new ideas and strategies to enhance the value received from your procurements, and we invite you to contact us with your own examples so that we can share the information with other procurement professionals across the country. Why reinvent the wheel when you can learn valuable lessons and new approaches that have been tested in the market?
The first of this three-part series explored Social Procurement as the exciting new frontier for Canada, and the second article examined some innovative new Early Market Engagement Strategies that can help to reality test your preliminary thinking and ensure your procurement attracts the right respondents. This final article in the series looks at strategies for defining, tracking and managing vendor performance.
Vendor Management Systems
Most organizations are now pretty good at the front end of the procurement and contract management cycle. New tools and strategies are adding flexibility and innovation into procurement planning, and group buying and other shared services organizations are capturing the economies of scale and leveraging volumes in many sectors. What we continue to see, however, is often an abysmal lack of attention to the management of the contracts once in place. This is usually partly due to the lack of political will to ensure adequate resources are devoted to this critical stage of the cycle, and partly due to the absence of a reliable and consistent system for recording, tracking and using information on vendor performance. In 2018 we highlighted a robust and comprehensive internal vendor management system being implemented over time at the City of Ottawa. The foundation for such systems begins at the procurement planning stage when considering the service levels, contract clauses and other tools that need to be included in the performance contract, to enable effective management. During our one day Managing and Evaluating Contract Performance participants explore different examples and actually spend time drafting meaningful and measurable contract expectations, coupled with realistic graduated remedies for addressing performance issues. As we emphasize, the best contract in the world does no good if it sits on the shelf, yet the best management skills in the world are of no use if contract expectations are vague and remedies are unclear or non-existent.
Let’s use 2019 to build stronger supplier relationships, maximize the positive impact our procurement initiatives can have, and embark on a new era of maximizing value while shoring up fairness and transparency of process.
Readers are cautioned not to rely upon this article as legal advice nor as an exhaustive discussion of the topic or case. For any particular legal problem, seek advice directly from your lawyer or in-house counsel. All dates, contact information and website addresses were current at the time of original publication.