An empirical approach to the evaluation of defence contractor performance

Abstract

ABSTRACTSupplier assessment and selection is critical in the world of international logistics and supply chain management. Despite this criticality, related processes and methodologies are largely subjective and anecdotal. A more quantitative empirical approach is needed. Improving the way government agencies and commercial businesses select suppliers can clearly result in cost savings, better schedule adherence, and higher-quality products. A key aspect of supplier selection for large government projects is effective evaluation and use of suppliers’ past performance data. However, organisations continue to search for better ways to adequately assess and utilise that data. This study uncovers new ways to more effectively use the United States government’s primary supplier performance evaluation system, called the Contractor Performance Assessment Reporting System. Based on the results of the study, a strong correlation has been shown to exist between contractors’ past and subsequent scores in terms of cost, schedule, and technical performance. The findings further indicate that the global commercial logistics community can use similar quantitative measures of contractors’ past performance to improve the effectiveness of their own supplier selection decisions.