Question Period Note: Vendor Performance Management System

Vendor Performance Management is used within Public Services and Procurement Canada and its client departments to assess vendor performance and use past vendor performance information in awarding contracts.

• The Vendor Performance Management program improves communication between government and vendors by periodically assessing their performance on cost, quality, schedule and administration
  • In federal government contracts, vendors are selected based on measures such as price, experience and capacity. The Vendor Performance Management program will also enable consideration of a vendor’s performance score against contractual obligations in previous contracts as part of the selection process
  • Vendors who have demonstrated good performance are favoured under this approach, which is expected to lead to improved procurement outcomes for Canada

Public Services and Procurement Canada (PSPC) had already begun developing a Vendor Performance Management (VPM) system as part of its efforts to modernize federal procurement and strengthen the system's performance.

In its new report on knowledge development and sharing, the Office of the Procurement Ombud (OPO) proposes five key solutions to address persistent systemic issues in federal procurement. These include the implementation of a VPM system. The VPM initiative, which has been underway for a few years now, responds to recommendations made by the OPO.

The first phase of the VPM applies to PSPC goods and services contracts for PSPC valued at more than $100,000, excluding those using a standing offer or supply arrangement. Vendors will be evaluated on such things as how well the respect timelines, incidents of consultant turnover and invoicing accuracy. Scores are not yet used in vendor selection. The next few months will be used to test the system and gather feedback. Vendors will be given a 90 day notice before scores are considered.

Program development was supported by extensive consultations with other levels of government, sector and regional buyers, vendor associations and legal services. Should the decision be made to expand it to other departments, adjustments will have to be made to the e-procurement solution. PSPC is currently working to expand the program for all contracts over $100,000, including those managed for other departments as part of its common service provider role.

• Given the recent implementation on September 2, 2025, there is no vendor performance data available yet. A process has been established to monitor the data and, over time, will provide insight on performance results. In addition, if a vendor disputes their performance score, an objection process has been established, including dispute resolution, to ensure fair performance evaluation
  • The department already had the Vendor Performance and Corrective Measures (VPCM) that triggers a suspension or other corrective measures when a contract is terminated for default. The Vendor Performance Management (VPM) will complement this policy by evaluating the performance against key indicators
  • While in some cases VPM assessments may support the documentation of a termination for default, VPM by itself will not lead to contract termination or vendor ineligibility