Page 131 - Procurement guidelines for smart sustainable cities - A U4SSC deliverable

Effective supplier relationship management helps to:

• develop mutual trust and understanding;

• drive continuous improvement, value for money and capture innovation;
• manage risk; for example, in the supplier’s ability to carry out the work; and

• deal with any unexpected events during delivery.

What it means

Challenges to building trust and understanding can include:

• using the contract to overcome problems rather than discussion;

• overuse of performance monitoring, leading to a lack of trust;

• misunderstandings relating to working culture or values;
• using rigid, “one-size-fits-all” contracts that are not designed for technology projects;

• an over dependence on one supplier, leading to a deterioration in quality or a lack of innovation.

To meet these challenges public officials and stakeholders should:

• ensure that problems are resolved as early as possible, without involving the contract or legal
teams;
• use contracts that allow for flexibility and adaptability in how outcomes are delivered;

• agree a code of conduct with the supplier at the start of the contract;

• use incentives to drive improvement in supplier performance;
• involve the supplier in drawing up product plans or “roadmaps”;

• allow the suppliers to propose how they will deliver their outcomes;

• allow the supplier to review the performance of their organization; and
• allow more than one supplier to work on larger projects, by breaking them into chunks or
allowing suppliers to collaborate.

Public officials and stakeholders should only end a contract early with a supplier if there has been:

• a serious breach of contract; for example, if a supplier has not abided by the terms of the
contract and has not provided the promised services; or

• consistent poor performance that has not improved following an improvement plan.

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