Shawn Hoover

Professor Narkon
F20 BA235-OL 42645 – Procurement: State/Local Govt.
27 November 2020
The Effects of Supplier Performances on Procurement

“Good supplier management is essential to a well-run supply chain” (Ferguson 1). When
I hear that quote, I think of suppliers and what relationships that they have with our Procurement
office. For many years now, we have focused on building supplier relationships to help with how
our suppliers perform when awarded a contract. However, we haven’t had great success with
how most of our suppliers perform, from the time the solicitation is released to when they are
delivering the goods or services. Many issues that arise with suppliers are bidding on
solicitations, withdrawing their bid once the bid has closed, requesting change orders after being
awarded the contract, and delivering issues. These issues have had major impacts on our
Procurement office such as spending more time evaluating bids, spending more money, missing
delivery deadlines that our agencies have set for their customers, and agencies unhappy with the
performance overall of the vendors. I am going to outline some of the research I have found
about supplier’s performance and how it negatively effects a procurement office.

How withdrawing bids affects a Procurement Office

The first issue that seems to happen a lot is once a supplier places their bid on a
solicitation and the solicitation closes, the supplier withdraws their bid because they didn’t read
the specifications and therefore can’t deliver the goods or services. Once a bid closes, a
procurement officer will reach out to confirm details of the supplier’s bid and this is when the
supplier asks to withdraw their bid. Dr. Muddassir Admed who is a Supply Chain Leader states
“Providing Unclear Specifications & Requirements during procurement does not always turn out
well”(1) which leads to a lot of our problems with suppliers. I believe that the suppliers either
don’t read the specifications or don’t understand them which then leads to the Procurement
officer having to move on to the next vendor after spending time evaluating the bid and causing
the evaluation process to take longer to award.

Change Orders

One of the biggest issues our office faces is change orders being requested from the
agencies. This occurs on a weekly basis from vendors not being able to provide all the quantities

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Shawn Hoover
Professor Narkon
F20 BA235-OL 42645 – Procurement: State/Local Govt.
27 November 2020
after being awarded the purchase order. The agencies will request to cancel some or all the order,
which in return makes our office have to go back out and get quotes to satisfy the full
requirement that the original supplier couldn’t provide. Juan Rodriguez defines a change order as
“an official request for additional time and funds in order to complete revised contractual
obligations” (1). He goes on to state that change orders are headaches, when the complexity and
timeframe of the requested addition impose schedule constraints, which I believe is a good
definition of what a change order really is. This also occurs when the suppliers try to offer
substitutions for goods or services due to not having the original good that was offered. Change
orders are done more on our Construction desk which often leads to angry agencies, over
projects not getting completed on time and costing more money as a result of the new change in
the scope of work. All these things mention with change orders makes the procurement process
harder in our office and takes more time away from completing other procurements. The most
common issue that all procurement offices face other than change orders is delivery issues.

Delivery problems

Delivery problems cause issues in any organization and are a huge problem for our office
and trying to manage our supplier relationship. Suppliers may be able to offer goods or services
at a lower cost but usually come with a longer delivery. This happens a lot in our office and
causes the agencies to delay meeting their deadlines for their customers. They also may state on
their contract that they can deliver in 10 days and then once awarded the contract, delivers 30
days later. This, in turn, makes the agency want to either cancel or short pay the invoice due to
the lateness in delivery. This results in the agency not wanting to do business with that company
in the future, due to a lack of trust. I feel this is our biggest issue that needs to be solved in order
for our office to become more successful in procuring for our state government. According to an
article published on Deltabid, a Product Lifecycle Manager reveals: "My biggest procurement
challenge is getting suppliers to do what they say they will do." Making promises is not enough
to ensure a smooth supply chain. To ensure a long-lasting relationship with your buyers, you
need to be able to deliver according to your customer's expectations (1). 

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Shawn Hoover
Professor Narkon
F20 BA235-OL 42645 – Procurement: State/Local Govt.
27 November 2020

The graph above shows the 6 dimensions of procurement mastery (taken from Progora a journal
in the UK that specializes in public procurement) shows that the biggest dimension in
procurement to master is Supplier Management. This shows how important supplier management
is in being successful. I believe that based on the information researched and seen on almost
every website, the key message is on delivery. It is important to make the supplier accountable
for delivering on their promises. It is needed in order to maintain a smooth relationship with your
supplier base.

Recommendations on improving Supplier Performance

In order for our Procurement office to move forward in improving our supplier
performance, I have some recommendations that I would like to discuss. These recommendations
are as follows:

 Suppler training
 Train procurement officers to write better specifications
 Develop a review process before an agency submits a change order
 Hold suppliers accountable for not being able to fill all quantities that they agreed to
 Put suppliers in default if they don’t deliver on time

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Shawn Hoover
Professor Narkon
F20 BA235-OL 42645 – Procurement: State/Local Govt.
27 November 2020
 Enroll in a supplier performance website similar to Angie’s list

To first solve our issues relating to suppliers withdrawing their bids (due to unclear
specifications or not fully reading the specifications laid out), I propose offering a supplier
training. This training would invite any registered or interested supplier, who does or plans to do
business with the State, to become more familiar with reading a solicitation including all the
specifications. This can stress to them to not only read the entire bid but to know what you are
bidding on when you place that bid. This would help train them to ask questions if they feel the
specifications aren’t clear and would cut down on the number of suppliers withdrawing their
bids.

The next recommendation is to hold a quarterly training internally to help procurement

officers learn to read clear and precise specifications. This would also cut down on suppliers
withdrawing their bid if they are unaware about questioning the specifications if they are flawed.
This would also help the procurement officers be able to recognize an unclear specification and
could get with the end user agency to resolve.

The recommendation for change orders is a little different. In order to cut down on
suppliers trying to get change orders done, whether that be for changing the specifications,
delivering less quantities or asking for substitutions, there would be a review process internally
for the end user agency. We could develop a procedure that states before an agency can request
for a change order to be done, they would have to get the supplier to justify why it’s needed.
Following their reasons, the agency would let them know that once it is submitted to the Central
Procurement office that it may or may not be approved if the justification isn’t worthy of a
change order. They would also have to have the head of their agency sign off on this change
order before submitting to our office. This could deter them from requesting changes more often
and encourages them to work with the supplier to resolve without a change order.

In order to resolve issues in general with suppliers (who are withdrawing their bids,
offering substitutions, requesting change orders because of problems in providing requested
quantities or delivery issues) would be to hold them accountable. Our office already debars
suppliers and has an agency deficiency complaint form which documents when the agency is

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Shawn Hoover
Professor Narkon
F20 BA235-OL 42645 – Procurement: State/Local Govt.
27 November 2020
having issues with the suppler. However, I feel in order to fully hold the suppliers accountable,
we should begin to surcharge suppliers and place them in default to prevent them from bidding
on future solicitations until they pay the surcharge. Debarment is a long process that is very hard
to justify having to place a supplier on this list. I believe that anytime a supplier withdraws their
bid without a good justification, cannot deliver the quantities they bid (delivers late or never
delivers), or offer substitutions not suitable, we would surcharge them the amount over what we
originally were going to pay with the supplier. Then, before they could bid on any future
solicitations, they would have to issue payment to resolve the surcharge. This would weed out
any suppliers that do not have good intentions or ethics when it comes to doing business with the
state and would hold the suppliers accountable for their actions.

My last recommendation that our office should take to further improve our Supplier
Performance is enrolling in a website similar to Angie’s list called Procurated. This website
would help us identify strong performing suppliers who will improve our supplier base.
According to the Procurated website, “Procurated helps government, education, and healthcare
buyers find businesses who have done outstanding work for public organizations like theirs” (1).
I believe enrolling our office on this website and having access to check this website before
awarding a supplier, would help us maximize the highest quality suppliers and suceed in
establishing a great supplier pool to work with.

Moving forward with better Supplier performance

Munia Khan once said “You cannot buy trust; you have to earn it” (1). This quote
describes very well how important the relationship between suppliers and our office is. We must
maintain and grow by building our relationships to improve the supplier performance. Without
having trust in our suppliers, we won’t be successful in our main goal, which is to provide the
state with the goods and services needed to effectively operate government in cost effective
ways. The recommendations that I have presented in this paper will not only effectively improve
our supplier performance, but will also help our office grow and succeed in procuring the goods
and services needed by the agencies. This will help us build a bridge for our suppliers to trust our

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Shawn Hoover
Professor Narkon
F20 BA235-OL 42645 – Procurement: State/Local Govt.
27 November 2020
office in knowing that we do value their relationship with our office and the business that they
offer for the State of Louisiana.

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Shawn Hoover
Professor Narkon
F20 BA235-OL 42645 – Procurement: State/Local Govt.
27 November 2020

Works Cited

Ahmed, Dr. Muddassir. “17 Most Common Procurement Problems and Their Solution.”
SCMDOJO, Publisher Name Dr. Muddassir Ahmed Publisher Logo, 29 May 2020,
www.scmdojo.com/procurement-problems-solution/.

“Because Every Decision Matters.” Procurated, www.procurated.com/.

Ferguson, James. “Notes on the Procurement Supplier Selection Process.” Everything Supply
Chain, 13 June 2020, www.everythingsupplychain.com/procurement-supplier-selection-
process/.

Khan, Munia. “10 Inspiring Quotes EVERY Procurement Professional Needs to Read       .”
Superior Business Solutions, 16 Jan. 2020, www.inkonit.com/blog/10-inspiring-quotes-
every-procurement-professional-needs-to-read/.

Rodriguez, Juan. “Top 5 Reasons for Construction Change Orders.” The Balance Small Business,
2018, www.thebalancesmb.com/change-order-request-triggers-844405.

“ Key Challenges for Public Sector.” Progora, www.progora.co.uk/About/Blog/Progora-

Blog/December-2017/Key-Challenges-for-Public-Sector-Procurement.