Supplier fails a performance threshold before go-live
A hospital is replacing its patient-records interface. The supplier contract includes a 30-day acceptance test and a 10% retention payment. The supplier delivered the interface two weeks late. During acceptance testing it passes functional tests but fails a performance test: response time is 4.2 seconds against a specified 2.0 seconds under peak load. The supplier says the specification was 'aspirational' and asks for acceptance with a promise to optimise after go-live. The clinical safety lead refuses to sign off. Go-live is in 12 days and training has started. The contract references an acceptance criteria schedule, but the performance threshold is in an appendix marked 'informative'. The procurement officer wants to pay to avoid a legal dispute. What do you do?
1. What quality, procurement and issue-management actions should you take?
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Quality. The performance threshold is a specified requirement, even if the appendix is labelled informative; I would first establish its contractual status with procurement and legal. The test result is objective evidence of nonconformance, so it must be recorded as a defect with the test conditions, peak load and measurement method. I would not sign acceptance without either a passed retest or a formal, authorised concession.
Procurement and issue management. Open an issue, notify the supplier in writing, request a corrective-action plan with dates, and hold the retention payment pending resolution. Check contract remedies, acceptance criteria and any service credits. Assess clinical and operational risk if go-live proceeds with 4.2-second responses. Consider a conditional acceptance only if the concession is approved by the clinical safety lead and sponsor, with a dated remediation plan, fallback arrangements and consequences for failure. The decision must be evidence-based and auditable.
2. How do you advise the procurement officer who wants to pay to avoid a dispute?
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Advice to procurement. Paying to avoid a dispute converts a supplier performance problem into a project and clinical risk. Payment is not acceptance, and it weakens the main commercial lever, the 10% retention, before the defect is resolved. I would advise: do not release retention or issue final acceptance; document the nonconformance; seek a bilateral remediation agreement with a retest date, service credits or price adjustment; and reserve rights under the contract. If the supplier disputes the specification, ask legal to interpret the contract, not the project team.
Reasoning. A dispute is a cost, but an unsafe or unstable go-live is a larger cost. The procurement officer's goal is valid, but the method is wrong. I would offer a face-saving route: a without-prejudice remediation plan and a conditional acceptance subject to retest. This protects the relationship while keeping accountability with the supplier.
3. What would a defensible go/no-go recommendation look like?
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Defensible recommendation. State the decision criterion first: patient safety and contractual fitness for use, not the calendar. Then present test evidence, clinical risk assessment, supplier remediation plan, retest date, fallback if performance remains degraded, and the operational readiness status. Recommend one of three options: proceed only with formal conditional acceptance and approved concession; delay go-live until retest passes; or descope the interface function that triggers peak load, if clinically acceptable.
Sign-off. Name the authorities: clinical safety lead, sponsor, procurement and legal, and operations. Record conditions, expiry dates and consequences. A defensible recommendation is one that a reviewer could reconstruct from the evidence six months later. 'The supplier promised' is not a control; a signed concession, a retest result and an owned fallback are.