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Detailing Contractor Obligations

AS COMPANIES PREPARE to negotiate a new security agreement or to renegotiate an existing agreement with a contract security provider, they should practice due diligence. Understanding what a contract service has to offer and determining whether that provider can meet the company’s evolving needs is critical. A complete review of the security contract as well as a look at service, staffing, supervision, and communications issues can ensure that both parties are satisfied with the relationship.

This article assumes that the hiring company has already checked references, licenses, and insurance documentation; and conducted an appropriate competitive bidding process to select the final provider. The question now is how to ensure that the contract terms will lead to a good ongoing relationship.

There are many components to establishing precise contract or agreement language. For the contract to work, managers must make sure that all items are spelled out in detail.

Time frame. The first key point is the length of the contract. Is it for one year, two years, or more? Is there a renewal clause and what will constitute the renewal? Does it have pay increases built into the additional years and are they automatic or do they require prior approval in some format?

Rates. The bill and pay rates need to be spelled out. If the contract does not stipulate one rate for all personnel assigned to the company, the hours required for each officer must be clearly stated. Overtime pay must also be laid out in the contract. Most overtime, if billed, will be 1.5 times the normal rate of pay, for example, but there may be an agreed-to overtime rate that is higher. Similarly, if there is a training rate for new officers, that rate must be stated.

Payment terms. Payment terms must also be spelled out in the contract; the standard is payment within 10 days, but other time periods, such as 30 days, may be agreed to as part of the contract negotiations.

Staffing. The contract should spell out any special requirements for personnel who will be assigned to the facility; this will also help in recruiting the right people. If the company requires a minimum level of education, previous security experience, military experience, or certifications, those criteria should be stated in the contract.

Post orders. The post orders, sometimes called post instructions, must be clearly written to cover all aspects of each post assignment, including the handling of emergency situations, such as evacuation procedures and notification of proper authorities. Post orders must always be up-to-date and changes or additions must be dated and approved by the company and the contract security provider. A complete description of post orders should be in the contract.

Training. The contract should stipulate what training will be provided, where, how, by whom, how often, and at what cost. It should also require that all personnel will be cross-trained for all posts. Too many times, officer training is limited, and companies find that they cannot move an officer to another post in an emergency. Training should be documented, with results kept on file.

Uniforms. As a part of the selection process or in contract discussions, managers should ask to see a sample of all uniforms to be worn at the facility. This eliminates any unpleasant surprises. The contract should stipulate who is responsible for uniforms, what they will be, how many sets each officer will be issued, how they will be maintained and cleaned, and how unserviceable items will be replaced.

Supervision. The supervisory responsibilities of the contractor should also be spelled out, because the supervisor will typically also be from the service provider. Supervision of the security staff is extremely important to ensure full compliance with the contract and post orders.

The supervisor should be required to conduct spot checks at off hours and to reinforce training at every opportunity. These oversight activities should be documented. Any disciplinary actions should also be documented and submitted to the client company and the contractor. Supervisors should also be fully trained on all posts so that they can serve as a last-minute replacement.

Reports. The contract should spell out what reports will be required. All personnel should be required to complete daily activity reports for all shifts. There must be a system in place for these reports to be distributed and kept for future review. A separate report should be completed for each incident that occurs.

Communication. Meetings are an important aspect of any successful program. They give both parties the opportunity to discuss issues and devise corrective action if necessary. The contract should spell out the requirement for regular meetings to be held at least monthly between the contract staff and the client manager.

The meetings should be routine and consistent. An agenda should be submitted to all parties prior to the meeting so that everyone is prepared to discuss specific items. This approach will save time as well as make the meeting more productive.

There is a tendency to stop holding routine meetings after a period of time. This is a big mistake. Although the timing and duration of the meetings may have to be changed, it is important that the gatherings still take place on a regular basis. Having the meetings set as a requirement of the contract will help ensure that they do not fall by the wayside.

Performance. The goal in writing a contract is a good partnership between the security provider and the company. The items most often overlooked in contracts are renewal clauses, training updates, staffing requirements, and in some instances, penalties for noncompliance. The company may also want to include bonuses for good performance.

Service failures are often the result of lack of understandable contract language. By having a clear and concise contract, both parties know what is expected of them. That serves as the foundation on which a successful ongoing business relationship can be built.

Jack Thomas, CPP, is general manager for Smith Protective in Dallas, Texas. He is a member of ASIS International.