Supplier Performance Monitoring

Effective management of a supplier’s performance is necessary to minimize future risk to both a public body and the supplier. To be effective, the criteria on which a supplier will be monitored is to be clearly communicated by the public body to the supplier through the contract process and is to be based on the requirements of the contract. The monitoring should be initiated at the onset of the contract and continue through to the end of the contract. The extent of the monitoring would be dependent on the type of commodity being acquired. Additionally, when determining the extent of monitoring required a public body should consider the value of the acquisition and the degree of risk to the public body associated with the procurement.
Public bodies should utilize a progressive discipline approach when monitoring performance. When a concern has been identified, the initial step would be to engage in oral communication with the supplier to discuss the problem and seek to rectify the problem at its onset. Public bodies should not wait until the completion of a contract to identify an issue. Public body officials should keep records on their meetings with suppliers for future reference and for inclusion in the procurement file. If an issue continues to persist, public bodies should engage in further discussions with the supplier and advise the supplier in writing to rectify any deficiencies or address performance issues. Suppliers should be allowed a reasonable period of time to correct any issues and if performance does not improve, escalating the issue may be necessary.

Public bodies should address further issues of non-performance in accordance with the terms and conditions of the contract and take any further action as required. Public bodies are advised to engage legal counsel, as necessary, and particularly when consideration is being given to terminating a contract.
Suspension of a Supplier’s Bidding Privileges

In accordance with Section 26 of the Regulations, where a public body identifies an issue that may indicate noncompliant performance or substandard performance by a supplier, the head of the public body may review that supplier’s previous performance under contracts issued by that public body. For the purpose of this section, “noncompliant performance” means performance by a supplier which does not satisfy the terms, conditions and specifications of the contract, and “substandard performance” means inferior performance by a supplier over the course of 2 or more contracts which does not fulfil the terms, conditions and specifications of the contract to the satisfaction of the head of the public body.

Where, after such a review, the head of the public body determines that the performance of the supplier on a single contract is noncompliant performance or cumulatively over several contracts is substandard performance, the head of the public body may suspend the supplier from bidding on procurement with that public body.

When determining the length of the suspension consideration should be given to the past bidding history of the supplier and the contract on which they underperformed. The supplier performance system and the ability to suspend a supplier is dependent upon documentary records that identify any issues or concerns.

Issue of Suspension

When the head of the public body decides to suspend a supplier, the head of the public body shall notify the supplier in writing of the decision and outline the reasons for the suspension, in detail, and its duration. Additionally, the supplier shall be advised of their right to appeal the suspension decision to the Chief Procurement Officer within 15 business days of receiving notification of the suspension in accordance with Section 27 of the Regulations. The head of the public body shall notify the Chief Procurement Officer of a suspension by copy of the letter to the supplier.

Appeal of Suspension

A supplier may appeal a suspension by a public body to the Chief Procurement Officer within 15 business days of receiving notification of the suspension. If a supplier appeals a suspension, the Chief Procurement Officer shall notify the head of the public body and the head of the public body shall provide the Chief Procurement Officer with all pertinent information and records regarding the suspension within the time frame identified by the Chief Procurement Officer. The Chief Procurement Officer shall review the suspension and decide upon it within 30 business days of receiving the appeal and may confirm, vary or cancel the suspension. A suspension of bidding privileges remains in effect until such time that the CPO renders a final decision. If the supplier is aggrieved by the decision of the Chief Procurement Officer they have the right to appeal to the judge of the Trial Division.

Extension of Suspension

In order to ensure that a suspension is not circumvented, the suspension of bidding privileges may be extended to new or existing businesses of the principals of the suspended supplier engaged in the same or similar business activities of the suspended supplier.