Supplier Relationships and Performance Management Sub-Committee—May 24, 2017

Date:

May 24, 2017

Time:

1 pm to 2:30 pm

Agenda

1. Words of welcome (Matthew Sreter, Senior Director, PSPC, Acquisitions Branch, Strategic Policy) (5 minutes)
2. Introductions (5 minutes)
3. Approval of the Terms of Reference (5 minutes)
4. Update on the initiative (15 minutes)
5. Engagement session (45 minutes)
6. Decision on the next meeting (5 minutes)
7. Round table (10 minutes)

Location

Public Services and Procurement Canada
Conference Centre
Room Com #10
Place du Portage IV
11 Laurier Street
Gatineau Quebec

Record of discussion

Welcome

Mr. Matthew Sreter welcomed members of the sub-committee.

Supplier relationships and performance management intiative—update

Mr. Seoane presented the Supplier Relationships and Performance Management (SRPM) Sub-Committee initiative’s update and members discussed the different components of the regime.

Draft policy instruments and draft performance clauses:

• Suppliers will need to know who will be evaluating their performance, and exactly what responsibilities belong to whom. Do not put the supplier in the middle of the “he said, she said”. Often when working with the Government of Canada (GC) there are “too many cooks in the kitchen” and suppliers are unsure who they are accountable to. Roles and responsibilities need to be clarified
• The first pilot will be with Public Services and Procurement Canada (PSPC), but PSPC is working with Shared Services Canada and Canada Revenue Agency to potentially run simultaneous trials

Central repository of Past Performance Information: no comments.

Supplier relationship framework: no comments.

Supplier assessment scorecards and evaluation grids:

• Scorecards will be shared with suppliers
• Those businesses that do not do a high volume of business with the GC will want to know how to start developing their report cards. Maybe the regime could be applied retroactively to projects underway to get them an opportunity to understand how they will be evaluated. Suppliers would very much like to have their good performance count towards their report card
• Do not be afraid to do retroactive evaluations, on a voluntary basis, if you can make suppliers understand that it will give them a competitive advantage
• Suppliers will perceive any system as subjective. The way to mitigate this is to allow the opportunity for suppliers to appeal to decision makers, and to make it known to them how they can influence the subjectivity of the decision makers. Subjectivity is acceptable as long as it is consistent. Too much regulation, though, surrounding the evaluations will lead to too many unintended consequences. We have to trust the evaluators to do their job

Supplier selection methodology: no comments.

Supplier appeal mechanism:

• It is best to have the evaluations occur regularly to prevent the suppliers from regularly appealing final decisions. It is better to allow them to discuss how to improve their score for the next evaluation

Contract and real property agreement expectations setting: no comments.

Supplier performance management monitoring framework: no comments.

Industry concerns:

• Suppliers will ask if they can use references from previous contracts to speak to their performance. Could they speak to a previous contracting officer? Particularly those who are new to the program will want their past good performance considered
• The policy will allow for different options to prevent barriers to entry. For example, previous references can be used, a median score could be used for new suppliers, etc.
• The supplier had previously proactively went to NASA to ask how they could score a perfect score of 5. They proudly published their score on their website
• It will not matter if the regime will or will not add additional burden to the suppliers. It will matter to the suppliers whether the additional burden is worth it. There are people in professional services, for example, who leave the market because it is too burdensome to work with the GC. Even $1,000 matters
• Additional overhead costs: Avoid saying incremental costs. The regime could reduce work in other areas. For example, in the future, suppliers will not have to round up references. This is part of the holistic approach to procurement modernization. Ultimately, it will be more cost effective for suppliers
• A prime concern is that there will be a lot of dialogue, appeals, and arguing over “how to get a perfect 5” especially at the beginning. It could be painful in the early stages because there will be a perceived increase of costs

Roundtable discussion

• The GC should want suppliers to fight to be on the pilot. The regime should permit for an assessment to be labelled “interim” and allow the client and suppliers to agree on the performance for the upcoming two months, for example. It is best to avoid having to use a formal redress mechanism. We want the client and suppliers to be able to work together to achieve their goals. It is better to give the suppliers an opportunity to do better than argue over what score a performance deserved
• The perception amongst suppliers is that the government always regulates to punish, not to incentivize. It needs to be made clear that this is about incentive

Action items

• The SRPM team to provide final Terms of Reference in English and French
• The SRPM team will modify the presentation according to the discussions and will share it with the members

Date modified:

2017-09-22