Guide to Modern Vendor Relationships

Author: Liz Busch

Public sector entities rely on the expertise and hard work of their contractors to successfully deliver on their mandates. Therefore, the relationships between the public sector and vendors are vital to the smooth operation of any government organization.

But how can government employees ensure these positive vendor relationships while still maintaining control of the deliverables provided by contractors and the associated costs? What common mistakes erode vendor relationships and how can they be avoided? How can government do better in this current world of supply chain issues and labour shortages?

When thinking about these questions, consider three different types of vendor relationships:

(a) vendors wanting to do business with government;

(b) vendors participating in a solicitation process; and

(c) contractors providing goods, services or construction to government.

A General Vendor Relationships

Creating positive relationships with vendors starts before government has decided what to buy. To illustrate this concept, the table below outlines problematic and better approaches for some typical government objectives:

Objective Problematic Approach Better Approach Why
To establish contracts for a new or updated program No communication with vendors before the solicitation is released. Issue a draft solicitation asking for vendor feedback before final release. Gives interested vendors advance notice of a potential solicitation which assists with their planning.

Allows government buyer to consider vendor feedback and make changes before issuing the solicitation.

To access vendor’s expertise to help define scope Contact one vendor for advice. Publicly post a request for information, asking vendors to provide advice and feedback. Allows any interested vendor to respond, resulting in multiple points of view and options.

Avoids perception (or reality) of favouritism.

To avoid delays or issues from interested parties who may not agree with government’s approach Use information gathered in the past to plan how to address these concerns. Engage interested parties through community sessions where government can present draft plans and receive feedback.

Include suggested changes wherever feasible.

Demonstrates a proactive approach to ensuring interests are heard and addressed where possible.

Ensures current concerns and conditions are known (which may differ from the past).

Solicitation Processes

Once a government buyer has issued a solicitation, they must balance meeting the government’s needs with maintaining the interest of quality vendors. This next table describes how vendor interest and the value they offer can be better realized.

Objective Problematic Approach Better Approach Why
To issue a solicitation that reflects current needs. Make minor edits to solicitation documents from a previous similar purchase and issue. Start with the solicitation template, using the previous solicitation and contract as references only.

Meet with those directly involved to understand the current challenges and how needs have changed since the previous purchase.

The solicitation is structured to meet current needs.

Past mistakes are not repeated.

To ensure a shared understanding of scope Language used in the solicitation is overly complicated.

Information pertaining to vendor’s costs is not provided (e.g. insurance, if travel expenses apply, etc.).

Rewrite the specifications / requirements in plain English.

Consider what vendors need to know to propose a competitive approach and price.

Avoid jargon and spell out acronyms.

Encourages true competition, as all participating vendors have similar understandings of scope.

Helps avoid the buyer receiving deliverables that differ from expectations. 

To attract experienced and qualified vendors Solicitation asks vendors to describe their experience, but does not explain how much they should have or what “similar” means. Provide benchmarks in the solicitation for vendor experience (e.g. “5 or more years’ experience in the past 10 years delivering x, y and z”).

Use minimum scores to avoid awarding to vendors with inadequate experience but a low price.

Vendors with inadequate experience will likely not apply or be successful.

Experienced vendors are likely to respond as they will not be competing against low-ball prices from less qualified vendors. 

Explaining results in a debrief is easier, as expectations were identified in the solicitation.

To have sufficient budget for the successful submission Assume that the costs for past similar procurements have not significantly changed.

Do not disclose the budget in the solicitation.

Research current contractor costs (e.g. labour, fuel, equipment, etc.).

Contact colleagues with similar procurement needs to ask what they’re paying.

Adjust the budget and/or scope accordingly.

For scored solicitations, disclose the budget as either information or a mandatory ceiling.

Addresses current supply chain and labour issues.

Avoids the most common reason that solicitations are cancelled – the successful submission is over budget and additional funds are not available.

Contract Management

Relationships with contractors are of utmost importance, as governments rely on the deliverables they provide. This final table describes some situations that can impact to the quality, timeliness and cost of deliverables.

Objective Problematic Approach Better Approach Why
To receive the expected deliverables Do not contact the contractor until the first deliverable is provided.  Conduct a pre-work meeting to confirm everyone’s understanding of deliverables.

Check in periodically to review progress and encourage the contractor to ask questions.

Identifies any misunderstandings about deliverables early when they’re easier to address.
To address any unexpected events without significantly impacting the project Expect the contractor to identify and manage all impacts associated with the event. Contact the contractor as soon as the event is known to discuss how to minimize its impacts. A proactive approach demonstrates that the government recognizes the potential impacts and will support the contractor to find satisfactory resolutions.
To seamlessly manage any government-initiated changes Give direction to the contractor about the change without considering the impacts to timelines, costs and quality. Discuss the change with the contractor and ask for their suggestions on how to address it with minimal impacts to timelines, costs, and quality.

Where the impacts are significant, consider if the change is worth doing.

The contractor’s expertise helps to realistically assess the impact of the change to the project.

Government makes an informed decision.

 

We invite you to checkout our training and service offerings pertaining to public sector procurement.

Author: Liz Busch

Disclaimer: The views and opinions expressed in this article are those of the Subject Matter Experts and do not necessarily reflect the official policy or position of The Procurement School.

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