2-35 Conduct Supplier Capability (Technical and Financial) Analysis

Selection of the right suppliers is critical to the Postal Service’s success. The right suppliers augment the Postal Service’s ability to deliver high-quality and innovative service to its customers and to reduce operational risks. Analysis of supplier capability is conducted before contract award to determine the supplier’s performance ability throughout the life of the contract. Financial capability analysis aids in determining the supplier’s ability to remain financially solvent, and technical capability analysis helps determine whether the supplier has the technical ability and capacity to perform the work.

Financial capability is essential for suppliers to assure continuity of supply and reliability of product quality. It is difficult for a:

• Financially weak supplier to maintain quality.
• Supplier who does not have sufficient working capital to settle an expensive claim.
• Financially unsound supplier to work overtime to meet a promised delivery date.

Technical analysis confirms the reasonableness of the type and amount of resources proposed by the supplier. This analysis covers the proposed types and quantities of materials, labor, processes, special tooling, facilities, the reasonableness of scrap and spoilage, and other factors set forth in the proposal.