Vendor Risk Assessment in Defence Procurement: A Framework
Effective vendor risk assessment is the cornerstone of successful defence procurement. This framework provides a structured approach to evaluating potential suppliers across multiple dimensions.
The Five-Dimension Risk Model
1. Financial Stability (Weight: 25%)
2. Technical Capability (Weight: 20%)
3. Indigenous Content Compliance (Weight: 20%)
4. Delivery Track Record (Weight: 15%)
5. Strategic & Security Risk (Weight: 20%)
Scoring Methodology
Each dimension is scored on a scale of 1–5, with weighted aggregation producing an overall **Vendor Risk Score (VRS)**:
$$\text{VRS} = \sum_{i=1}^{5} (w_i \times s_i)$$
Where $w_i$ is the weight and $s_i$ is the score for dimension $i$.
Implementation in Your Procurement Workflow
1. **Pre-bid stage:** Use the framework to shortlist vendors before tender release
2. **Bid evaluation:** Apply weighted scoring during technical evaluation
3. **Contract management:** Monitor VRS periodically throughout contract lifecycle
4. **Post-contract review:** Update vendor profiles based on actual performance data
*This framework is adapted from best practices in defence procurement across multiple jurisdictions, localized for the Indian regulatory context.*
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