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Procurement Perspectives: Assessing a contractor’s performance in government

0 55 Government

by Stephen Bauld

In a world of mistrust between some in the construction industry and government procurement officials, proper assessment of contractors has become paramount.
Procurement Perspectives: Assessing a contractor’s performance in government

Contractor evaluation is not an exact science when it comes to different branches of government and this very fact creates suspicion related to the procurement process.

You can't apply different standards when assessing performance to the various industry partners and contractors. In the case of vendor performance, you need a proper matrix that everyone understands and can be measured against on equal footing.

When we look at this aspect of procurement, conceptually there are a number of different types of assessment that may be carried out. For example, comparative versus discrete to a particular transaction; continuous versus milestone assessment; pre-contract assessment, which incorporates the process of pre-qualification of contractors; and assessment during supply and post-supply assessment.

To achieve optimal results, a contractor's assessment must be carried out using rigorous methodology and diagnostic feedback must be provided to each contractor, both to ensure fairness of the process and to allow it to adjust its performance in accordance with perceived inadequacies. Saying we will do better next time is not a sufficient answer for a contractor during the debrief with an owner. Instead, assessment activity should be properly recorded so that a periodic audit of the process can be carried out to demonstrate whether that assessment was done fairly.

It has always been my opinion that assessment must be carried out to the high standards of integrity that the public may rightly expect. One of the basic objectives of any contractor performance review is to provide an underpinning for enhancing the quality assurance aspects of the contractor-owner relationship. Another basic goal of performance assessment is to encourage a contractor to align its performance with the goals of the municipality.

There is a considerable reason to believe that performance levels improve simply because the contractor realizes that performance is being properly measured and evaluated in a fair and across the board procedure. It is also reasonable to believe that performance evaluations can lead to a more informed decision-making process related to the quality of performance that can be expected of contractors.

During regular speaking engagements, I continue to advance the concept that measurement and evaluation can lead to the 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 may possibly be able to reduce inventory levels on items stocked in stores. Risks can be identified earlier and proactive steps 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, for obvious reasons, customers are concerned about the quality of service that they are receiving. What I have found in many cases, however, is that an anecdotal approach has been taken towards this important question. A more rigorous approach measures contractor performance against a standardized set of criteria.

For best results, it is advisable to use only experienced assessors to produce a complete picture of the municipality's contractors. It then follows that municipalities seeking to rely upon past performance must be able to 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. The simple fact is that improved two-way communication assists contractors in identifying and matching the municipality's needs.

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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