2.1 Supplier progress evaluation

Once a procurement contract is running, the procurement office must know whether the supplier is delivering what the contract promised: the right goods, works or services, of the agreed quality, at the agreed time and price. Supplier progress evaluation is the structured way of finding this out while the contract is still live, so that problems are corrected before they become losses. For example, a procurement officer managing a one-year contract for the supply of office stationery may review the supplier every quarter against delivery dates, quality complaints and invoice accuracy, and raise any shortfall at a review meeting before the next order is placed.

In public procurement in Kenya, the Public Procurement and Asset Disposal Act, 2015 places responsibility for contract management on the procuring entity, and the evidence collected during evaluation (inspection reports, delivery records, user feedback) forms part of the contract records.

2.1.1 Meaning

Supplier progress evaluation is the systematic and periodic assessment of how well a contracted supplier is performing against the terms, specifications and performance indicators of the contract, measured at agreed points during the life of the contract. It looks at actual results (what was delivered, when, at what quality and cost) and compares them with what was agreed.

It differs from supplier appraisal, which is carried out before a contract is awarded to judge whether a prospective supplier is capable. Progress evaluation is carried out after award, on a supplier who is already performing.

Key features of supplier progress evaluation

• Contract-based: the standard of measurement is the contract itself: the specifications, delivery schedule, price and service levels the parties signed.
• Periodic: it is done at set intervals (monthly, quarterly, per milestone or per delivery), not once at the end.
• Evidence-based: judgements rest on records such as goods received notes, inspection reports, complaints logs and invoices, not on impressions.
• Two-way: results are shared with the supplier so that they can explain shortfalls and agree corrective action.
• Action-oriented: each evaluation ends with a decision: continue as planned, agree an improvement plan, issue a warning, apply contract remedies or, in serious cases, recommend termination.

2.1.2 Importance of supplier evaluation

Evaluating suppliers during the contract protects the organisation's money and service delivery. A procurement office that does not evaluate its suppliers usually discovers problems only when a user department complains or when the contract ends, by which time remedies are harder to apply.

• Ensures contract compliance: evaluation shows whether the supplier is meeting the specifications, quantities, delivery dates and prices in the contract, and gives early warning of breaches.
• Protects value for money: by checking quality and price against the contract, the organisation avoids paying for substandard goods or unapproved price increases.
• Supports timely corrective action: problems such as late deliveries are spotted early, so the supplier can be asked to improve before user departments are affected.
• Provides evidence for decisions: documented results support decisions on payment, contract extension, renewal, application of liquidated damages or termination.
• Reduces supply risk: regular evaluation highlights suppliers who are struggling financially or operationally, so that the organisation can prepare alternatives.
• Improves supplier performance: suppliers who know they are being measured, and who receive clear feedback, usually improve their service.
• Informs future sourcing: performance records help the procurement office decide which suppliers to invite or prequalify in future procurement.
• Promotes accountability and transparency: in a public entity, documented evaluation shows auditors and oversight bodies that public funds were managed properly.

2.1.3 Tools used in supplier evaluation

Several tools are used to collect and organise evidence about supplier performance. Each tool answers a different question: the scorecard measures performance against set indicators, surveys capture the views of users, audits test compliance with requirements, and the inspection and acceptance committee report confirms whether what was delivered matches the contract. A procurement office normally combines several of them.

2.1.3.1 Supplier scorecards

A supplier scorecard is a structured record that measures a supplier's performance against a set of key performance indicators (KPIs), each with a weight that reflects its importance to the organisation. The scores are combined into an overall rating that can be compared over time and between suppliers.

Common KPIs on a supplier scorecard:

• On-time delivery: the share of deliveries received on or before the agreed date.
• Quality: the share of deliveries accepted without rejection or the number of defects reported.
• Price compliance: whether invoices match the contract prices.
• Responsiveness: how quickly the supplier answers enquiries and resolves complaints.
• Documentation and compliance: accuracy of delivery notes and invoices, and continued validity of statutory documents such as the tax compliance certificate.

Example: a procurement office rates a supplier of printing paper for one quarter, with each KPI scored out of 100.

Weighted score = weight × score, for example 30% × 90 = 27. The total, 81 out of 100, is then compared with the bands the organisation has set (for instance "good", "needs improvement", "poor"), and the low scores on price compliance and documentation become the subject of the review meeting with the supplier.

2.1.3.2 Survey and feedback tools

Survey and feedback tools collect the views of the people who use the goods, works or services: user departments, stores staff and sometimes end customers. They capture aspects of performance that delivery records do not show, such as the attitude of the supplier's staff or the usefulness of a service.

Common survey and feedback tools:

• User satisfaction questionnaires: short forms, paper or online, in which user departments rate the supplier on agreed aspects such as quality, timeliness and courtesy.
• Complaints and compliments registers: a log kept by the procurement or stores office of every complaint and commendation about a supplier, with dates and outcomes.
• Feedback meetings and interviews: structured discussions with heads of user departments to gather detailed comments.
• Online forms and e-procurement system ratings: where the organisation's system allows users to rate a supplier after each order.
• Supplier self-assessment forms: the supplier reports its own performance, which is then checked against the organisation's records.

Example: after each quarterly cleaning service period, the procurement office may send a short questionnaire to every department head, asking them to rate cleanliness, punctuality of cleaners and response to requests on a scale of 1 to 5.

2.1.3.3 Audit and compliance tools

Audit and compliance tools test whether the supplier is meeting the legal, contractual and quality requirements of the contract, rather than only the visible results. They are used where the risk is high, for example in contracts for food supplies, medical or laboratory items, security services or construction works.

Common audit and compliance tools:

• Supplier audits: planned visits to the supplier's premises to check processes, storage, quality control and records against the contract.
• Compliance checklists: lists of requirements (valid licences, tax compliance certificate, insurance cover, staff contracts for service providers) ticked off at each review.
• Document verification: checking certificates of conformity, warranties and test certificates for authenticity, for example confirming that a product carries a valid Kenya Bureau of Standards mark where one is required.
• Contract compliance reviews: comparing invoices, delivery notes and variations with the contract to detect overcharging or unapproved changes.
• Third-party reports: reports from independent inspectors, laboratories or consultants engaged to test or verify performance.

2.1.3.4 Inspection and acceptance committee report

In public procurement in Kenya, the accounting officer of a procuring entity appoints an inspection and acceptance committee to inspect goods, works and services delivered under a contract and to confirm whether they meet the contract requirements before they are accepted. The committee records its findings in an inspection and acceptance committee report (often with an inspection and acceptance certificate), and payment is processed only on goods or services that have been accepted.

Typical contents of an inspection and acceptance committee report:

• Contract details: contract or order number, supplier's name, description of the goods, works or services, and the date of delivery or completion.
• Committee members present: names and designations of the members who carried out the inspection.
• Items inspected: quantities ordered, quantities delivered and quantities inspected.
• Inspection findings: whether each item meets the specifications, with any tests carried out and their results.
• Decision: items accepted, items rejected and the reasons for rejection.
• Recommendations: for example replacement of rejected items, partial acceptance, or referral for further testing.
• Signatures and date: signed by the committee members as the official record.

The report is an evaluation tool because it gives an objective, documented record of each delivery. Over the life of a contract, a series of reports shows whether rejections are rising or falling, which feeds directly into the supplier scorecard and the supplier progress report.