If your preferred had NOT been serving you good all these while.
What are you going to do?

I happened to come across an organization had practice a way to kick out the preferred vendor in a professional manner.

Since your preferred vendor had been assigned and serving for a while and had not been giving you the best service such as late delivery, delayed quotation.

One of the ideal approach is to invite another vendor and promote it to be another preferred vendor as well. Thus you have 2 preferred vendors serving you on the same products, say stationery or network equipment.

Since your initial preferred vendor is not serving you good. You can seek all your internal team members to get more quotations and work with your new preferred vendor.

As time goes by, the procurement team can generate a report and states that the volume transact with the initial preferred vendor is reduced. You can then tell the initial vendor that the organization would like to stop the service and terminate the business relationship.

This thus give both side an opportunity a leeway to disengage the service.

Lesson Learned: Never dis-engage a vendor right away. Due to contractual obligations, it makes no business sense to terminate immediately. But use a strategic move to move a vendor away from the list.