Supplier Performance Management Policy

CS200224 R001 FEB 2021

Supplier Performance Management Policy (the “Policy”) will be implemented by 01Jan2021.

The Policy sets out a programmatic approach to addressing supplier performance. The Policy sets out the consequences for both good and bad performance and provides a clear path of

escalation to address poor supplier performance.

The Policy will leverage the best practices of INPO 14-005 Principles for Excellence in Nuclear Supplier Performance. This document defines expectations and standards for achieving

excellence in nuclear supplier performance.

Supplier Performance Management Policy

The fundamentals of Supplier Performance Management are:

1. Suppliers shall consistently deliver high quality products and services, safely, on time, and on budget.

2. Suppliers shall promote and implement industry best practices during the delivery of products and services.

3. Bruce Power shall implement contract obligation management to ensure full accountability with respective parties.

4. Bruce Power shall measure each supplier’s performance in a transparent and collaborative manner.

5. Bruce Power shall provide reasonable opportunity to suppliers to recover performance.

6. Past performance shall be a key consideration for the award of new business.

BRUCE POWER’S

SAFETY FIRST

Supplier Performance Management Policy

Supplier Performance Management Policy

Effective 01Jan2021, all key strategic suppliers will have their respective performance assessed against the criteria set out below. Performance will be tracked in performance scorecards.

PROCUREMENT CHANGES

All procurement evaluations will take into consideration past performance of work or services on behalf of Bruce Power (as applicable) of each supplier proponent, financial risk, and capacity risk. For clarity, the evaluation criteria will make clear that financial stability and capacity of each proponent will be evaluated (evaluation criteria have been updated accordingly).

Upon review and approval of the total cost of ownership (“TCO”) evaluation model, all performance, risks, COPQ, and change orders will be used to evaluate which supplier is the actual and verifiable lowest cost supplier.

PERFORMANCE

Monthly scorecards will assess safety, capacity, quality, cost, and schedule. Suppliers will be provided an overall performance score based on these categories.

Supplier interventions to drive performance improvement and risk mitigation will follow the framework below:

During the procurement process, the Supplier Management Office will deliver to the evaluation team an overall performance score to be applied / considered as part of the evaluation process.

As the process matures, COPQ and oversight costs will also be applied in a TCO model for evaluation.

Implementation Plan

Level Description of Performance Gap BP Action Required Supplier Restrictions

1 Single Discrete Issue SCAR or recovery plan Required Continue with current strategies

2 Programmatic Issue or Trend of Issues

or significant issue

Performance Improvement Plan

Prepared

Increased monitoring and

procurement impact

3 Continued Non-Improvement for

6 months after PIP established

Mobilize Alternate Supplier Restrict awards

4 Continued Non-Improvement for

12 months after PIP established

Transition Work to New Supplier Exit Relationship

Supplier Performance Management Policy

LEVEL 1

Single discrete issue

• Once the SCAR or recovery plan has been implemented the issue will be resolved.

LEVEL 2

Programmatic issue or trend of issues or significant issue

• The supplier will be placed on a performance improvement plan (“PIP”)

• There will be ongoing monitoring and regular meetings to ensure all PIP actions are completed as per the identified TCDs

• Once the PIP actions are completed, there will be ongoing effectiveness reviews to ensure that the issue or issues have been corrected and the necessary steps implemented to prevent reoccurrence.

LEVEL 3

Continued non-improvement for 6 months after PIP execution

• The issue or trends are not recovering within a 6 month window after PIP implementation• Same themes e.g. safety (not different

individual events) or cross functional / organizational e.g. human performance.

e.g. human performance. • Bruce Power will start mobilizing a new

supplier and begin restricting awards of new work

LEVEL 4

Continued non-improvement for 12 months after PIP execution

• The trends/issues are not improving; the corrective actions are ineffective

• Multiple red statuses in the same area are a clear indicator that the cause is not understood by the supplier or the corrective actions that they have put in place are inadequate

• Once a credible commercial and technical alternative is available and implemented, Supply Chain will take the necessary steps to terminate the relationship with the supplier, to the extent practicable. Consultation with key stakeholders will take place prior to a final decision being made.

Performance Criteria for Improvement

Supplier Performance Management Policy

At the core of the risk monitoring program for key strategic suppliers is identification of areas of concern for mitigation before they result in a performance issue. Monthly, key strategic suppliers will be assessed for financial and capacity risk using industry standard methodology. Mitigating recommendations are implemented as risks change and recommendations are provided pre-award. The cost of these mitigating actions will be considered during the evaluation phase.

Furthermore, key strategic suppliers will be assessed based INPO 14-005, Principles for Excellence in Nuclear Supplier Performance, to improve and sustain performance. These 7 key principles were selected based on a review of comparable principles INPO developed for nuclear power plant operations.

1. Nuclear Safety Culture Quality

2. Materials, Equipment, Configuration Control, and Quality Assurance

3. Human Performance

4. Training and Qualifications

5. Continuous Improvement

6. Operating Experience and Lessons Learned

7. Procurement and Contracting of Materials and Services

NON-KEY SUPPLIERS

PerformanceAssessment of performance is completed through the supplier performance evaluation criteria. It assigns a ranking of Green, Yellow, or Red.

The Supplier Management Office will provide these rankings, which may be used as a reward/penalty during the procurement process.

Risk MonitoringFinancial and capacity assessments will be also be completed to support procurement activities. The Supplier Management Office will provide these rankings and reward/penalty which may be used during the procurement process. Mitigating concerns & recommendations are provided for procurement to be implemented pre-award.

Risk Monitoring & INPO 14-005 Principles for Excellence in Nuclear Supplier Performance