When purchasing material goods, a low-bid contract may be the most appropriate one. When buying office goods, for example, a buyer can set very specific criteria for those goods and purchase thousands of identical items in lots.
This process is vastly different from a contract for services, such as those for security forces. These contracts are frequently written for long periods, usually three years or more, making it difficult and usually costly to switch to a different provider if service is poor.
Contracts for a security force merit particular attention. Unlike most contract services that operate behind the scenes, such as custodial services, a contracted security officer is often in the public view and interacts with employees, customers, and visitors. The officer is, therefore, viewed as a representative of the client, and not just in the eyes of the public. As numerous lawsuits indicate, courts have found clients liable for the actions of contract security officers.
To win and maintain low-bid contracts, contractors must cut corners, such as reducing hourly wages for officers to the point where they cannot attract quality people. Cutting corners results in a cascading series of problems.
For instance, even if they happen to get a reasonably competent person to take the job, that person will not stay long enough to become proficient at it. That's because uncompetitive wages strongly affect the turnover rate (the rate at which personnel leave a particular employer and need to be replaced). For some contractors, the turnover rate is as high as 300 percent: That's the equivalent of replacing the whole work force three times in a year.
High turnover causes the contractor to lower recruiting standards to constantly fill vacancies. This results in lower quality personnel placed with the client. At the parking garage mentioned earlier, wages were so low that they were competing with local fast-food restaurants, which got the better personnel because they provided warm, indoor environments for workers, as well as easier work; the parking garage security officer was expected to patrol the unheated garage's distance of roughly two miles' twice each shift.
Wages that are set too low also result in a high rate of call offs, where an officer calls in sick at the last minute, which can lead to unsatisfactory fill-in situations.
Other practices of low-bid contractors that directly affect the quality of officers include: minimal training; little or no preemployment screening; limited supervisory visits; and few, if any, health, dental, and education benefits. It's important to remember that benefit packages are critical for retaining workers.
The Best-Fit Solution
Rather than letting the dollars determine who will deliver security services, the manager responsible should first assess the company's exact needs. If you hold that responsibility, you need to develop a detailed request for proposal (RFP). By assessing the bids that this RFP generates, you will best be able to determine which service provider offers the most cost-effective fit for your specific needs and thus the best-fit solution.
Contractor relationship. It helps if you first gain an understanding of the relationship that is created when you contract for guard services. Security officers are employees of the contractor, not the client. This may sound obvious, but the proximity of the client to the individual officers, combined with infrequent contact with contractor management, tends to blur this line. The client must keep in mind that it is hiring a contractor, not individual officers.
Contractors provide a service through their security officers, and after the contractor is selected, the client's involvement in security officer personnel issues should be minimal. The client must receive a stable level of service from the contractor regardless of which particular officers are posted. Supervision, training, and officer discipline should be carried out by the contractor.
It also follows that the contractor should establish compensation and benefit levels for each class of officer (full time, part time, supervisor, and so on), regardless of the contract the officer is on. These benefits should be at a level that is adequate to retain good personnel. Instead, what often happens is that the contractor develops custom officer-benefit packages for each client.
Some clients may be sold on the idea that a custom benefit package will help retain quality security officers for their contract. However, in these cases the client frequently ends up paying for extensive security officer benefits with no guarantee that all officers on the contract, especially fill-ins, are receiving the benefits that the client is paying for.
Selecting a contractor that is the best fit requires a more exhaustive selection process than just seeking the low-bid provider, but the extra effort will have a long-term benefit. The client must commit to the process and allow adequate time to methodically carry it out. This may mean starting as early as four months before the selected contractor will be expected to begin work. Because of the time and level of detail required, some companies find it beneficial to engage an experienced independent consultant to direct and manage the process.
Needs assessment. Before an RFP can be created, you must first know exactly what you're looking for. Some companies start by interviewing employees and even customers who have interacted with the current security force to determine specific issues that should be addressed in the new contract. What isn't working on the current contract and what is?
You also need to establish clear benchmarks for what the security force is expected to accomplish, and how that might affect who gets a contract. For example, a high level of deterrence may require guards to have a "hard" look and a low level of interaction with employees and customers; or, a security force might need a high level of customer service skills, which may require security officers who have more developed people skills.
Other considerations are the environment that the officers must work in (indoors or outdoors, office or warehouse environment, patrol or static post), what equipment you want the contractor to supply (such as radios and vehicles), whether the job requires the officer to be armed or meet some minimum physical requirements, and whether the on-site force is large enough to require full-time supervisory personnel.
RFP. Establishing requirements and expectations for a contractor in a well-defined request for proposal is a critical step. The RFP must establish specific needs of the client such as:
The RFP must identify differences in duties between posts. It should also set a minimum experience level (and corresponding compensation) for each post. That information should be included in the post-information section.
Additional services. In addition to laying out the desired level of officer qualifications and the duties they will be expected to perform, the RFP should discuss other aspects of the contract. For example, most contractors offer ancillary services, such as providing background checks or installing guard-tour systems. At a minimum, the RFP should ask what additional services are available from the contractor.
The RFP must also explain what the client wants from the contractor with regard to management of security officers, such as creating levels of supervision, resolving no-show situations, and responding to client complaints.
Further, there must be a clear identification of responsibility for equipping security officers with items such as notebooks, tour recording systems, communication systems, flashlights, identification cards, and computers as needed.
Company data. Keeping in mind that the goal of this process is to hire a contractor that has the overall capability to deliver the service the company needs (the best-fit contractor) and not just a loosely connected conglomeration of security officers, the company must also solicit information that will help it assess the quality of the contractor. This information can include the turnover rate for security officers, benefits and training offered to employees, the extent of the preemployment screening conducted, and references from similarly sized clients in the local area.
Limiting references to the local area is critical due to the recent flurry of acquisitions and mergers in the industry. Today's branch office of a nationally reputable contractor may be yesterday's fly-by-night operation, and it will be several years before the local operation meets the standards of the national parent company.
Metrics. Finally, the RFP must communicate the ongoing expectations for performance during the life of the contract. Performance indicators, or metrics, should be established to track contractor compliance with requirements established in the RFP. Potential candidates for performance indicators include:
To put teeth in the performance indicators, the results should be tied to specific outcomes such as financial rewards or penalties for the contractor.