CIPS L4m3 Commercial Contracting · Free Practice Question Easy
Question 13
Consequences and actions that arise from certain KPI scores must be...? Select TWO that apply.
-
A
Mutually agreed
-
B
Unilaterally imposed by the purchaser
-
C
Deliberately omitted
-
D
Documented
-
E
Terminated
Reveal correct answers
Correct answers: A, D
Explanation
Supplier performance management and monitoring is a fundamental part of contract management. It starts with setting KPIs, targets and consequences or actions that arise from KPI scores. The measures, objectives and targets used in the monitoring of the supplier’s performance must reflect those that were agreed when the contract was let. That is why it is important to specify a commitment to continuous improvement at the outset. It would be unfair to the supplier to suddenly introduce a range of measures after the contract had begun - however if such an introduction mid-term through the contract is unavoidable then it should be negotiated and agreed in a professional manner and not merely imposed on the supplier.
In conclusion, the details of how KPIs will be monitored and the actions or consequences resulting from scores achieved must be documented and agreed between the parties. This details may be embedded in the specification or the main body of the contract or it may be set out in a SLA.
Reference:
- Performance Monitoring of Suppliers - CIPS Knowledge summary
- CIPS study guide page 101-109
LO 2, AC 2.2
Discussion
Think the marked answer is wrong, or have a better explanation? Share it below — comments appear after review.
