Chapter 7 - Supplier and Contract Performance
7.1 Importance of Supplier Performance
Among the important reasons for maintaining properly documented supplier performance are the following:
- To use when considering debarment or suspension of suppliers;
- To use in making decisions on tie Bids;
- To use as evidence in court cases;
- To justify a claim for liquidated damages;
- To justify a declaration of supplier default;
- To justify GW seeking delivery from another source and charging the difference to the defaulting supplier;
- To use as justification for withholding payment until performance is completed; and
- To use in processing warranty claims.
It is critical to manage the performance of all suppliers. P2P will not seek to disqualify any supplier without a properly documented performance file.
Payment may not be withheld unreasonably from a supplier if services/goods have been delivered and invoiced, unless there is demand in writing for the supplier to correct an unsatisfactory situation with a definite "date certain" for performance.
Assuring proper performance by suppliers requires cooperation and communication between GW schools/departments and Procure-to-Pay. Timely action on the part of the school/department and Procurement is a prerequisite for enforcing the terms of purchase orders and contracts.
7.2 Non-Compliance
Failure by suppliers to deliver on time, in the proper quantities, or to meet other contractual agreements or performance milestones are serious discrepancies that must be handled in a prompt, uniform and fair manner.
When a noncompliant circumstance becomes apparent, the school/department should promptly contact the supplier to request rectification of the situation. A complete record should be made of the contact to include the name, title and telephone number of the person contacted and any promises made by that person.
If the supplier continues to be noncompliant after the initial contact, notification of noncompliance should be forwarded to Procurement with complete background information.
P2P will provide the supplier with a written notice to "cure" the situation. If the supplier fails to comply with the terms of the contract or order after this notice, P2P will cancel the agreement, order from another source, and seek to recover the difference in price, if any, from the noncompliant supplier.
P2P will document the supplier record to provide a complete history of the supplier's performance..