Commercial terms
What is a preferred supplier list (PSL)?
A preferred supplier list is the set of agencies a hirer has approved to supply them. Being on it is usually a precondition of doing business, and it is held on agreed terms.
Entry is typically via a tender with compliance requirements attached, and remaining on it depends on performance and audit outcomes rather than only on the original submission.
Terms on a PSL are usually the hirer's, including rate caps and payment terms, which constrains the commercial relationship in ways an agency's own terms of business do not.
Neutral vendor and master vendor arrangements sit alongside, where one supplier manages the others, and they change who an agency's commercial relationship is actually with.
What goes wrong in practice
- Compliance requirements agreed at tender that operations cannot actually meet.
- Performance data not tracked, so review meetings are argued rather than evidenced.
- Sub-supply arrangements entered into without checking what the PSL terms permit.