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Best Practices for Contracting Vendors

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Working with contractors can be a daunting task. The real issue is that “preparing to work with contractors is a daunting task!” If you are having to find vendors to provide services for your business or your client, then this is for you.  It is the act of getting prepared to work with third-party contractors aka “vendors” that can be overwhelming. The research, RFP, phone calls, questions, emails that must be responded to, but with the right approach and the right tools and information, it can be a breeze!  First look at the vendor as a partner. You’re looking to fill a need and obviously one that’s vital to your success or why bother, right?

When are hiring on behalf of your clients, here a few tips to help keep you in good stead with your clients by getting them the best value, avoid significant pitfalls, and in the process keep you and your business protected.

Find the best for your clients needs. Dont settle for who fits within your budget, or who’s nearby. Create an RFP (request for proposals) and include the appropriate detailed information for the services needed and contracting requirements. You should also equip yourself with some knowledge about the area in which you will be contracting. I remember the first time I had to incorporate the use of buses in a program I was organizing on Capitol Hill for a client, I learned that my bus operators had to have Federal Operating Authority (FOA) to cross state lines which is issued by the Department of Transportation (DOT)  for example. I also learned about the standards of operations and code of ethics from the American Bus Association and, various issues like annual inspection requirements, labor regulations, etc. I included this information in my RFP , such as evidence of FOA, required certifications, and liability insurance policies – not just certificates of insurance. Other contractors like florists and audio-visual had to be certified and cleared to operate in certain buildings.  Put in the effort; it’ll benefit you in your negotiations.

Check for references especially if you are not very familiar with their work or have no first hand experience. You’re hiring someone on behalf of your client so remember, they represent your decision-making abilities. Your goal is to get the best vendor for the job, period. It’s not your money being spent, but your clients money so do your due diligence in finding the right vendor. I tend to hire vendors who are adept a being able to quickly grasps the project or job, offer a viable strategy, and present a plan for flawless execution.  The money will come second when the right partner is found because they will bring value!

Be sure that whatever written agreement in place is between the vendor and your client. Even though you are negotiating the contract, never put the contract in your name or the name of your business. Unless you are ready to assume complete accountability for meeting the requirements of the agreement, you should avoid this at all costs. The contractor’s are the ones who fulfill the contract to your client and your client should be signing the agreement. The only time this is not the case is when there is an existing management agreement that provides this authority. Realize this also means that should there be a disagreement at any point, it is between your client and the vendor.  For purposes of this article, I will assume you have already dealt with and documented in writing the issue of liability between you and your client.  Hmm, maybe that should be the next blog.

When you get to the contracting stage, always know what’s negotiable. Do your research and know what’s reasonable to ask as a concession and what’s not. If you do, you’ll learn for example, negotiating labor rates on rigging services at union hotels is generally off the table but, discount on equipment and  certain fees is very much a negotiable. So, decide in advance what things you absolutely need to have in your contract including specific language that offers protections to your client before you start the negotiation process. Ask for a copy of their contract boiler plate so you can have an idea of the language you’ll be negotiating.  This also enables you to be upfront and weed out those who meet your standards.

Never sign contract agreements on behalf of your clients if you don’t have the authority through a written management agreement.  This goes back to the same issue of having a management agreement in place that give you authority. However, most meeting and event entrepreneurs do not take on this responsibility because we know in fact it is a liability.  All contracts (good ones that is) have an authorized signer clause that includes language indicating that the person who is singing the agreement actually has the authority to bind the association/organization/corporation to the contract.

Following these general rule should keep you on the right course to finding the right partner for your outsourcing needs!

 

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About SOJCEO

Smith, Ozman and Joseph’s (SOJ) is a fearless team of talented meeting planners and event producers with brilliant expertise and an ambitious passion for hospitality. For over a decade we’ve created award-winning events of all types for clients around the globe. Our CEO, Kimberly Smith has over 20 years of event management and production experience. She's an entrepreneur with keen insight, witty style, and an ability to see the big picture. She's worked with organizations all over the world making their events a true art form! This blog will share ideas to help would be entrepreneurs, experienced event planners, and anyone who enjoys a good read!

Discussion

One thought on “Best Practices for Contracting Vendors

  1. Excellent article, I’ll use for my upcoming projects!

    Like

    Posted by Gerald | April 22, 2014, 8:39 pm

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