"Occasionally, when checking the Texas state database to verify vendor information, I get a report that indicates the vendor is “Not in Good Standing”. A call to the Texas state comptroller’s office revealed that this ranking is generated when certain reporting requirements are not met. It could be anything from not furnishing requested update material (i.e. address and ownership changes), maybe a portion of a report is missing or possibly money is owed from a prior report. The exact cause of the ranking is not available to the general public.
- Do we consider this vendor undesirable and not use them?
- Do we contact the vendor for an explanation?
- Can we rightfully refuse to do business with them based on the vague nature of this report?
- Is the decision to do business with this vendor based solely on internal policy?
- Is there any governing/auditing agency that would consider our using such vendor as a bad business practice?"
A decision about whether to do business with a vendor listed somewhere as "not in good standing" is a matter of internal policy. We are not familiar with the structure or charter of the Port of Houston, nor how it may be governed.
In general, we recommend that you check a few sources for vendor validation/verification, rather than just one source, particularly when one source is inconclusive, as with the state comptroller's designation.
A call to the vendor itself is a good idea, since simple mistakes can and do occur.
For ideas about other resources that can be helpful when checking on a new vendor, see TAPN's Vendor Due Diligence: Verifying New Vendor Legitimacy, under AP Research --> Vendor Master File button, or click here.
As for a governing/auditing agency, we are not familiar with Texas government organization nor of the relationship between the Port of Houston and the state, and cannot comment. We recommend you check with the Port controller about rules, requirements or regulations the Port may have to follow.