SOP5 - Supplier Evaluation
Ongoing performance evaluation of suppliers via scorecards, annual surveys and corrective-action loops.
| Group Policy & Procedure | Document No. | P-POL-006 |
| Group Supply Chain | Ver. No. | Rev Date | 0.4 | 08 APR 2026 |
| Title: Supplier Evaluation & Management | Effective Date | 08 April 2026 |
BUKHATIR GROUP
Strength through Diversity
Group Policy and Procedure
Group Supply Chain (GSC)
Supplier Evaluation & Management
Lifecycle, KPIs & ASL Governance
Document No: P-POL-006
Copyright © 2026 Bukhatir Group
Revision Control
This document is issued under the authority of Bukhatir Group and applies when carrying out the activities described. Revisions may be issued as necessary under the authority of the Group Head of Procurement. Revision history is recorded below with every revised policy.
Revision History
| Ver. No. | Effective Date | Description |
| 02 | September 2016 | Original Procurement Policy |
| 0.3 | March 2026 | Procurement Policy – Supplier Evaluation & Management |
| 0.4 | 08 April 2026 | Redesign, content modernization & flowcharts – Supplier Evaluation & Management |
Revision Sign-Off
| Approving Committee | Name | Signature |
| Endorsed by — Group Head of Supply Chain | Mohamad Koussa | |
| Reviewed by — BIIL CEO | Mr. Ayman Ismail | |
| Reviewed by — Group Chief Financial Officer | Mohamad Adnaan Sait | |
| Approved by — Group Vice Chairman & Group CEO | Mr. Salah Bukhatir |
Distribution List
| # | Departments |
| 1 | Business Unit Procurement Departments |
| 2 | Group Supply Chain (GSC) |
| 3 | Finance, Legal, Compliance, Internal Audit |
| 4 | Business Unit Management |
1. Purpose & Objective
This SOP defines the end-to-end process for managing suppliers across the Bukhatir Group — from pre-qualification, through onboarding, performance monitoring and periodic review, to off-boarding. It establishes risk-tiered due diligence, quantitative KPIs and governance of the Approved Supplier List (ASL).
2. Scope
Applies to all suppliers of goods, services, works and sub-contracts to any Group Business Unit.
3. Four-Stage Supplier Lifecycle
| Stage | Purpose | Key Outputs |
| 1. Pre-qualification | Screen and shortlist prospective suppliers against minimum criteria | Pre-qualification questionnaire (PQQ), risk classification |
| 2. Onboarding | Formal admission to the ASL with appropriate due diligence | Signed Supplier Code of Conduct, ASL entry, master data |
| 3. Performance Monitoring | Measure delivery performance against KPIs | Quarterly scorecards, NCRs, corrective actions |
| 4. Periodic Review / Off-boarding | Confirm continued suitability or exit supplier | ASL Committee decision: Approved / Warning / Suspended / Removed |
4. Risk-Tiered Onboarding
Onboarding rigor scales with supplier criticality and risk exposure.
| Tier | Classification | Due Diligence |
| Tier 1 | Critical / Strategic | Full financial health check, extended questionnaire, site visit, references |
| Tier 2 | Important / Recurring | Standard questionnaire, document verification, references |
| Tier 3 | Transactional / Low-risk | Streamlined onboarding: basic KYC, trade licence, VAT registration, bank details verification |
5. Quantitative KPIs
Supplier performance is measured on the following KPIs, captured in Oracle and aggregated into a quarterly scorecard.
| KPI | Definition | Target |
| OTIF | On-Time, In-Full delivery rate | ≥ 95% |
| Quality NCR Rate | Non-conformance reports per 100 deliveries | ≤ 2 |
| HSE Incident Rate | Incidents per month at Group sites | 0 |
| Invoice Accuracy | % invoices passing three-way match first time | ≥ 98% |
| Responsiveness | Avg. response time to RFI / clarification | ≤ 2 business days |
6. Performance States
| State | Criteria | Action |
| Approved | All KPIs on/above target | Continue as ASL; eligible for all events |
| Warning | One KPI below target | Corrective action plan within 30 days |
| Suspended | Multiple KPIs below target or HSE/compliance breach | Temporary exclusion from new awards; root-cause review |
| Removed / Blacklisted | Persistent failure, serious breach, fraud or Code of Conduct breach | Removal from ASL and Oracle; notification to all BUs |
7. Supplier Code of Conduct
Input Tax Credit (ITC) Compliance — FTA Decision No. 13 of 2026
Effective 1 October 2026, the supplier evaluation and management lifecycle must incorporate ITC verification requirements per FTA Decision No. 13 of 2026 and P-POL-032.
Pre-Qualification & Onboarding:
• Complete the Supplier ITC Verification Checklist (Form F-ITC-01) for all new suppliers during pre-qualification. This includes identity verification, address/place of business check, and risk indicator assessment.
• For suppliers expected to provide supplies exceeding AED 375,000 over 12 months, obtain a bank confirmation letter from an authorized UAE bank and assess public reviews/media coverage.
Annual Review & Re-Verification:
• ITC supplier verification must be renewed at least every 12 months. Align re-verification with the annual supplier performance review cycle.
• During annual review, reassess all three risk indicators: address stability, key employee continuity, and transaction proportionality.
Approved Supplier List (ASL) Governance:
• No supplier shall remain on the ASL without a valid, current ITC verification. Expired verifications must be flagged and the supplier suspended from new POs until re-verified.
• ITC verification status must be tracked as a mandatory field in the supplier master record.
Reference Forms
Form F-PQQ-01 — Pre-Qualification Questionnaire
Form F-SPR-01 — Supplier Performance Scorecard
Form F-SFS-01 — Annual Supplier Feedback Survey
Every supplier shall sign the Group Supplier Code of Conduct at onboarding. The Code covers ethics, anti-bribery, HSE, data protection and sub-contracting. Breach of the Code is grounds for immediate suspension pending investigation.
• Form F-ITC-01 — Supplier ITC Verification Checklist
• Form F-ITC-02 — Supply ITC Verification Checklist
8. Annual Two-Way Supplier Feedback Survey
Once per year GSC runs a two-way feedback survey: the Group rates the supplier and the supplier rates the Group. Results are shared with the supplier and used to drive joint improvement actions. Low Group-side scores (e.g., late payment, unclear specifications) are actioned by GSC and Finance.
9. ASL & Blacklist Governance
GROUP-LEVEL ASL GOVERNANCE The Approved Supplier List (ASL) is governed at Group level by the Group Procurement team, chaired by the Group Head of Procurement. GSC maintains the Blacklisted Suppliers list. All BU Procurement teams shall communicate to GSC whenever they wish to blacklist a vendor, with supporting documents. |
A quarterly ASL Review Committee — chaired by the Group Head of Procurement and including Finance, Legal, Compliance and BU Procurement — reviews all performance states and admission/removal decisions.
Suppliers with no transaction for 24 consecutive months are archived from the active ASL. Re-activation requires refreshed onboarding.
Oracle shall not allow POs to non-ASL suppliers without formal exception approval.
Blacklisted vendors are removed from Oracle after clearing any outstanding financial obligations, preventing any BU from issuing POs to them.
10. Definitions & Acronyms
| Acronym / Term | Definition |
| ASL | Approved Supplier List |
| BU | Business Unit |
| DOA | Delegation of Authority |
| GSC | Group Supply Chain |
| HSE | Health Safety and Environment |
| KPI | Key Performance Indicator |
| NCR | Non-Conformance Report |
| NDA | Non-Disclosure Agreement |
| Oracle | Enterprise Resource Planning System |
| OTIF | On-Time In-Full |
| PQQ | Pre-Qualification Questionnaire |
| SRM | Supplier Relationship Management |