Supplier assurance – having confidence in your suppliers – Procurement Essentials
20 Feb 2025 01:10 PM
Supply chain assurance is a systematic approach to identifying, assessing, and mitigating risks throughout the supply chain
What is supplier assurance in procurement and why is it necessary?
Most organisations rely upon suppliers to deliver products, systems, and services. They need to be confident that the suppliers they work with are ‘fit for business’ and able to fulfil their contractual obligations because a vulnerable supply chain can cause damage and disruption to organisations. This is especially important within the public sector, where safeguarding the delivery of public services is crucial.
Supplier assurance is the process of evaluating potential suppliers for your procurement to mitigate risk. It encompasses a range of processes and practices designed to ensure the reliability, quality, and integrity of the products and services you buy.
Supply chain assurance offers numerous benefits to organisations including:
- risk assessment and management: by identifying and addressing potential disruptions, companies can minimise the impact of supply chain risks on their operations
- quality control measures: Supply chain assurance helps maintain consistent quality standards throughout the production and distribution process
- compliance monitoring: With increasing regulatory requirements, supply chain assurance helps businesses stay compliant with relevant laws, policies and industry standards
- enhancing reputation: A well-managed supply chain contributes to a positive brand image and customer trust
Using the example of a secondary school, operating on tight schedules that align with academic terms, any delays in the supply of educational materials or resources could disrupt teaching schedules and impact student learning experiences. Supplier assurance can help identify strong supply chains with effective logistics, quality control measures and contingency plans to ensure that materials and services are satisfactory and delivered on time.
In the case of an NHS trust undertaking a construction project such as building a new day treatment centre, a supplier might have the exact expertise that you need, however, what would happen if you discovered half way through a project that they couldn’t meet their contractual requirements and complete the building works because they are financially unstable? Supplier assurance helps organisations better understand the financial capacity of suppliers to successfully carry out a contract. It can help assess whether appropriate risk mitigations need to be and can be put in place to address any identified issues with a bidder’s financial capacity.
Supplier assurance – the challenges for the public sector
There are several challenges for public sector organisations when successfully implementing the supplier assurance process. These include but are not limited to:
- complexity of global supply chains and corporate structure: As supply chains become increasingly global and complex, managing risks across multiple tiers of suppliers becomes more challenging.
- maintaining supplier compliance: Staying on top of policies, procedures, technology, etc. is an ongoing process, not a one-off checkbox. It needs to be continued post-award throughout the lifetime of your contract.
- technological integration and resource limitations: Implementing new technologies for supply chain management can be costly and time-consuming.
How does CCS assess supplier’s suitability?
Each year CCS helps thousands of public and non-profit organisations buy goods and services from suppliers in the private sector. We design our commercial agreements to help you buy what you need when you need it.
Our agreements have a list of pre-evaluated suppliers, but what does this mean and how does it help to eliminate risk for your procurement(s)?
In a world of many emerging risks, CCS monitors and manages supplier assurance and due diligence; to align with industry best practice and to balance supply market risks for our customers.
We understand that our supply chains support the essential services you provide, so it’s vital our customers can be confident that they will remain comprehensive and reliable. We are always in the process of taking steps to strengthen our supplier assurance, in particular by building our capacity to assess and monitor suppliers’ economic and financial standing, in line with commercial best practice.
All suppliers are contractually obliged to adhere to assurance requirements in order to be compliant with CCS agreements. The core requirements at pre-qualification stage include:
- appropriate insurances
- cyber security
- adherence to policy areas such as sustainability
- financial stability
Some category/market areas require further assurance and that is made clear in the individual terms and conditions for each specific agreement.
CCS monitors the core requirements of suppliers throughout the life of the agreements, which can save buyers time and effort when checking the reliability of their contractual partners.
What does each stage of the CCS supplier assurance process include?
Pre-qualification assurance compliance includes:
- insurance: certificates are checked for correct values, dates and genuine issuers for professional indemnity, product/public liability, and employer’s liability
- financial stability: Financial assessments are carried out in accordance with playbooks to reflect the tiering of the specific lot
- cyber security: Cyber Essentials (+) certificates are checked for correct dates and genuine issuer
- modern slavery: selection questionnaire responses to specific questions are checked at the compliance stage post bidding to ensure that the supplier adheres to the policy as set out in the bid pack and terms and conditions
- carbon net zero: Carbon Reduction Plans are checked by our teams against the requirements as set out in PPN 06/21 to ensure compliance
- prompt payment: our selection questionnaire covers mandatory and discretionary exclusions including areas such as prompt payment
Post-award assurance compliance includes:
- insurance: certificates are monitored near expiry and suppliers contacted for updated versions. Lack of response or incorrect documentation is escalated to the Commercial Agreement Manager (CAM) for that agreement to manage, resolve or suspend.
- financial stability: Dun and Bradstreet alerts are sent through to CAMs to review and take appropriate action. Again, the steps taken are set out in the terms of the contract, typically including requesting and reviewing the latest accounts and in the event these are not robust, requesting a guarantor or suspension from the agreement until such a time as is financially stable and viable.
- cyber security: Cyber Essentials(+) certificates are monitored for expiry, suppliers are contacted for updated versions. Again, a lack of response or incorrect documentation is escalated to the Commercial Agreement Manager (CAM).
- supplier relationship management: is carried out by each CCS category group for the suppliers appointed to their agreements, and this can include; measurement against agreement KPIs, timely submission of management information, performance against contracts, outputs against social value themes for example.
Buyer responsibility
Once entered into a contract, contracting authorities are expected to manage their terms and conditions, KPIs, any policy or social value obligations as written into their contract and to assure themselves that the awarded supplier is adhering to their lawful obligations.
Most of our agreements are underpinned by the Public Sector Contract which provides legal compliance and additional assurance to contracting authorities. Our commercial teams can advise on how to make the best use of this when awarding contracts.
Help and support
You can now find all of our Procurement Essentials articles in one place on our website.
More information and guidance for public and third sector buyers, as well as full details of all of our commercial agreements, can be found in the latest CCS digital brochure.