Department of Finance

Supplier Performance Management

Supplier Performance Management (SPM) is a business practice to measure, analyse and manage supplier performance in goods and services procurement contracts.

It assists contract managers monitor costs, identify performance gaps, drive improvement, manage risk and achieve contract outcomes.

The Department of Finance has developed the Supplier Performance Management Framework to assist agencies and support best practice contract management.

When applied early in the procurement process and performed correctly, agencies will benefit by reducing risk and improving the likelihood of outcomes such as:

  • Receiving quality goods and services based on contract requirements and required contract outcomes.
  • Managing risks associated with the contract.
  • Providing clarity to suppliers on the required standard of performance under the contract.

Without a SPM process in place, agencies may find themselves disadvantaged and open to unwanted risks such as:

  • Failure to fulfil contractual requirements.
  • Poor working relations with suppliers.
  • Not achieving value for money outcomes.

For more information on how to undertake supplier performance management, refer to the Supplier Performance Management Framework. It outlines key tasks, a five stage process and tools to support the agency as they work through their procurement process.

For further information visit the I Manage a Contract or Resources web pages in this section.


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