[an error occurred while processing this directive]
Go to previous section of document Link to chapter contents   Go to next section of document

Recognize and Reward Supplier

Recognition of a Supplier is the identification of exceptional contributions and capabilities from past experiences on Postal Service contracts. It is in the Postal Service's best interests to realize the importance of recognizing and rewarding supplier contributions and accomplishments. Rewarding suppliers for outstanding performance motivates further quality and encourages suppliers to strive for excellence in their products, service levels, and operations. Recognizing and rewarding suppliers strengthens strategic relationships, which fosters strong and productive supplier relationships.

Reward programs inherently benefit suppliers. Recipients will show substantial improvement in total quality and performance levels compared with unrecognized suppliers. Suppliers can also improve company reputation, increase marketability, and reduce costs. Posted on websites and used in marketing materials, recognition awards help suppliers develop new business and create strong relationships with other companies. By achieving a certain status with the Postal Service, suppliers can:

Improve their competitiveness

Improve their relationships with the Postal Service

Reduce inspections

Evaluating, Rating, and Ranking Suppliers

Performance metrics are tools that enable the Postal Service to objectively benchmark the ability of their suppliers to meet company performance standards. Supplier recognition and rewards are linked to these standards. Once supplier performance is measured, the Postal Service may choose to recognize and reward outstanding suppliers to cultivate the Supplier/purchaser relationship. Determining what to measure is the most important challenge of evaluating supplier performance. The metrics used to measure supplier performance should be simple and SMART:

Specific - metrics are specific and targeted to the area measured

Measurable - data that are accurate and complete can be collected

Actionable - easy to understand and clear, when performance is charted over time, which direction is "good" and which direction is "bad"

Relevant - do not measure everything, but only things that are important

Timely - measures for which data are available when needed

The major metric categories that manage supplier performance, although they may vary in terminology, are:






Other metrics may include continuous improvement, value, environmental, etc.

Metrics are reviewed internally and externally by the Supplier. The key metrics that are in place should be vital to supplier performance and aligned with Postal Service objectives and strategies.

Metrics are used to create a rating system, which may be weighted to emphasize factors crucial to successful performance. Feedback should be solicited from suppliers regarding ratings to assure buy-in. Ratings are used for:

Objectively comparing similar suppliers

Identifying supplier excellence award winners

Aiding future supplier selection (supply base optimization)

Return to top of page

Rewards and Recognition

Reward incentives can include assurance of future business or public recognition such as a plaque, awards luncheon or dinner, honors ceremony, press release, or outstanding letter or formal communication to the Supplier's senior manager. Recognition programs encourage performance improvements by rewarding suppliers with additional benefits, cash back for achieving performance-based objectives, and strategic or key supplier status. In return for some of these rewards, suppliers must be willing to invest and share risks on key Postal Service programs, innovations, and technologies.

Maintaining Supplier Commitment

To ensure that suppliers retain motivation to attain rewards and recognition, the frequency and number of awards presented to suppliers must be considered. The following tactics can assist the Postal Service in maintaining the prestige of supplier recognition and rewards:

Use high-caliber suppliers in the evaluations to reinforce the idea that the competition is of high quality.

Present the awards in a highly visible setting to ensure that the prestige of the award is recognized and remains high.

Hold awareness evaluations in a timely manner. Awards should be given frequently enough to keep suppliers encouraged, but not so frequently that the award is no longer seen as an accomplishment over a substantial period of time.


One of the most valuable benefits from supplier recognition and reward programs is feedback. After analyzing and assessing the results of the evaluation, the Postal Service should provide feedback to the suppliers and advise them of the changes that need to be made in specified areas. These programs also allow the suppliers to provide feedback to the Postal Service for improvements to Postal Service operations.

Return to top of page

Postal Service Quality Supplier Awards (QSA) Program

The Postal Service initiated the Quality Supplier Awards (QSA) Program to annually recognize its most outstanding suppliers (i.e., suppliers who have clearly demonstrated their ability and commitment to consistently provide quality products or services to the Postal Service). The awards are presented by the Postmaster General to publicly and formally recognize suppliers who have truly made significant contributions toward helping the Postal Service benefit from Supply Chain Management best practices. These efforts have been successful in providing positive bottom-line and performance results that ultimately help the Postal Service more effectively achieve its mission of providing mail service to the American public.

This program has recognized small, large, minority-owned, and woman-owned firms for outstanding performance since 1989. In the past, winners have been segregated by small and large company categories. From 1997 to 2002, winners were segregated further by three other categories:

Operational Services

Professional and Consultant Services


Quality Supplier Award (QSA) Criteria

Evaluating responses to a set of criteria is the Postal Service's basis for awarding suppliers the QSA. The criteria conform to commercial best practices by:

Being linked with the Postal Services strategies and objectives

Incorporating some of the major categories (i.e., cost, quality, etc.) used to manage supplier performance

However, the Postal Service can further align the QSA Program with commercial best practices by developing the criteria (standards) that suppliers are evaluated against into metrics.

The Postal Service follows other best practices by having its employees or teams who work closely with the suppliers participate in the evaluation. The "internal customers" provide information concerning the criteria. Unlike the QSA Program, where evaluation is based on qualitative evidence, most reward and recognition programs evaluate information that is in the form of quantitative data.

Return to top of page

Quality Supplier Award (QSA) Recognition and Rewards

The Postal Service publicly recognizes the suppliers who attain a QSA that follows commercial best practices. The winners receive a QSA plaque and a letter of commendation signed and presented by the Postmaster General at the QSA Ceremony, which is hosted by the Vice President, Supply Management (VP, SM). Postal Service Officers and Vice Presidents are also invited to the ceremony. A celebratory reception is held after the QSA Ceremony, which includes supplier attendees and members of the Purchase/SCM Teams responsible for the successful effort. A videotape, photographs, posters, and mementos such as "USPS Quality Supplier" lapel pins are provided to the winning suppliers to share with their employees and to aid their publicity efforts.

A press release is prepared by the Postal Service Media Relations Organization for appropriate distribution and publicity. Winning suppliers are able to create a press release themselves and use any other means to communicate the award (e.g., supplier website).

After the Postal Service establishes criteria and performs the evaluation, the suppliers' information can not only be used for the QSA Program but can also be leveraged to designate suppliers a certain status, such as "strategic" or "key." Currently, the Postal Service uses the information gained from the criteria as examples of cost reduction achievements and best practices implemented by various Postal Service Purchase/SCM Teams.

Quality Supplier Award (QSA) Feedback

Rewards can serve to strengthen Postal Service and supplier relationships and motivate not only the winners but also the losing nominees to improve and win the award the following year (if suppliers are not motivated, this can be a telling sign of the award program or the supply base). Providing feedback to suppliers, especially those that were not selected for the award, is essential to generating supplier understanding of necessary improvements and how to align with Postal Service objectives. The nominator, a Postal Service employee, receives feedback relating to how the Supplier can improve as a Postal Service supplier and QSA nominee.

Return to top of page

Other Topics Considered

Provide Feedback topic, Make Final Decisions task, Process Step 3: Evaluate Sources

Go to previous section of document Link to chapter contents   Go to next section of document