The Dreaded Non-Awarded Supplier Notification by Kelly Barner

Posted on May 1, 2012


“The object of this competition is not to be mean to the losers but to find a winner. The process makes you mean because you get frustrated.” – Simon Cowell (The X Factor, American Idol)

Not Quite Good Enough?

The goal of the sourcing process is to award at least one contract – a ‘winner’ you might say. In most cases, that also means there are one or more suppliers NOT chosen to receive any business. Non-award suppliers are as integral to the process as the selected companies, because they help us ask better questions, raise our expectations of the selected solution, and provide us with alternatives during the negotiation process.  Depending upon the length and complexity of the sourcing process, you may get to know all of your sales reps very well. And delivering bad news is never easy, but they can’t all get the award.

Although the opening quote from Simon Cowell is oddly applicable here, procurement is not nearly as glamorous as a reality TV talent competition. There are no lights, no adoring audience, no shocked judges, and I have never once met Ryan Seacrest in a procurement conference room.  But there is always that moment, the one where you have to send a supplier ‘home’ that needs to be faced.

My position on notifying ‘losing’ suppliers is not a prescription for how to handle delivery of the message. Many procurement departments have a policy in place that specifies how much information can be given out and what form the message must take (mailed/emailed written communication, phone call, face to face meeting). Timing is also a matter to be determined by each project team, as premature decision leaks may weaken your ongoing negotiating leverage.

My position is simply that the message needs to be delivered.

It is a good business practice to provide closure for non-awarded participating suppliers, especially if you can offer any feedback on their performance. The contract winner secures the opportunity to profit from their investment of time and resources in the sourcing process. ‘Losers’ should get something as well: as much specific information as you can provide about why they did not win the business and what (if anything) they might do differently in the future.

I have been in the position of messenger a number of times, and it is a task that I dread. I’ve been hung up on, sworn at, and criticized. We are all human, and no one looks forward to delivering bad news. Out of respect for all participants, I prepare for each call or email, giving real thought to the constructive feedback I can offer about their solution and their team’s delivery. In some cases, the sales representative I speak with justifies the decision we’ve made through their unprofessional response to the news.

However, when dealing with real professionals, those non-award calls can be incredibly productive conversations. Each call is a two-way debriefing opportunity. If a supplier is surprised at our reasons for not selecting them, we did not communicate effectively. When they ask legitimate questions in return, they may help uncover weaknesses in our decision making process. You don’t have to act surprised or let them know they are right, but you can feed that information back to the project team and make it part of the post-process review.

Telling yourself that ‘it is not personal’ when making award and non-award notifications carries little weight if you act as though it IS personal. Do the preparation. Make the call. Send the email. Remember that your sourcing process, and more importantly your results, will look very different if only the incumbent supplier is willing to participate. Since procurement is a cyclical process, we owe it to the company we represent to conduct ourselves in a manner that rewards all participants in the process.

Ultimately, being a loser or a winner has nothing to do with getting the business, but with the objectivity and professionalism of the process.

Be sure to join Kelly every Monday evening at 9:30 PM EST on the PI Window on Business on Blog Talk Radio as she provides Buyers Meeting Point’s up to the moment information on industry happenings and events.