Original Date: 04/06/1998
Revision Date: 01/18/2007

Vendor Supply Policy establishes a methodology for recording and maintaining contractors’ past performance information and uses it to positively impact future source selections. Prior to 1995, the Anniston Army Depot’s (ANAD’s) Directorate of Contracting was experiencing a 10% to15% delinquency rate among its vendors. A delinquency was any failure of a vendor to satisfy the conditions of the contract such as late delivery, parts shortages, rejected parts, delays, etc. The Federal Acquisition Regulation (FAR) Subpart 42.15 requires government agencies to establish procedures for recording and maintaining contractors’ performance information and data. The FAR states that past performance information is relevant information for source selection purposes regarding contractor actions under previously awarded contracts.

In 1995, the Directorate of Contracting implemented a policy concerning delinquent vendors based on the FAR language. The policy included an aggressive process improvement that set a goal of a 2% maximum delinquency rate. The process requires that a letter be sent immediately to the vendors notifying them of the delinquency; a delinquency report is published monthly to notify all ANAD buyers and supervisors; buyers and administrators call vendors to notify them of the delinquency report; prompt attention is paid to delinquencies by vendors’ top-level management; no voluntary solicitation of vendors appears on the report; and review of unique circumstances surrounding delinquencies is conducted. Contract administrators are allowed to negotiate some type of consideration when vendors are delinquent, which translates to an agreed upon cash value compensation by the vendor (e.g., money, extended warranty, additional services, spare parts) in return for the cancellation of the delinquency.

Since implementation of the current policy, delinquency rates have been reduced from 10% to15% to 2% or less for each of the past four years, resulting in increased on-time delivery of goods and services and increased customer satisfaction.

For more information see the Point of Contact for this survey.