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.

• Vendor Performance Management is a practical risk‑management tool that captures objective evidence of how vendors actually perform on cost, schedule, quality, and administration, and ensures that information is available for future procurements. This closes a known accountability gap and incentivizes better supplier behaviour
  • A supplier that did not meet timelines, demonstrated poor management or supplied an inferior product would be disadvantaged in future procurements
  • Vendor Performance Management improves procurement outcomes by requiring communication on performance throughout the course of the contract and by using past performance in the selection of suppliers

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 July 2025 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.

VPM applies to PSPC goods and services contracts awarded by PSPC valued at more than $100,000. 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.

VPM data is monitored monthly and over time will provide insight on performance results. The department already administers the Vendor Performance Corrective Measure policy, which triggers a corrective measure assessment when a contract is terminated for default or conditionally amended. The assessment may lead to ineligibility or conditions on future procurements.

VPM complements this policy by recording the performance against contractual obligations in terms of cost, quality, schedule and administration. A vendor objection process is established, including dispute resolution, to ensure transparency and integrity. VPM, by itself, will not lead to contract termination or vendor ineligibility.

• On September 2, 2025, Vendor Performance Management became mandatory in some internal Public Services and Procurement Canada procurements, and is expanding to gradually apply to all contracts worth over $100,000 awarded by Public Services and Procurement Canada by April 2027