Security guard company contract

Security Contractor Management

Negotiating a Security Guard Contract

by John Hewitt, CPP, CIPM II

One of the most important factors when choosing a security contractor to suit your facility, whether it is a commercial or industrial property is to evaluate each company that is involved in the bid process. All bids should be apples to apples. To get the best return on investment a guard company should divulge their turnover rate. The cost of turnover can be high due to re-training of new employees and overtime. During the bid process, it is not uncommon to have a spreadsheet with line items such as “Turnover Rate”, “Overtime”, etc. Each representative involved in the bid process should be required to fill out this sheet to ensure an accurate comparison and to help in your decision when awarding a contract.

Always make sure the quote is realistic, you can show your second choice bidder the cost proposal from your preferred bidder, with prices omitted. The second vendor can help you determine if your finalist has proposed a large enough system or left out important cost items, such as uniforms, vacation pay, holiday rates, etc.

Another important factor is to understand the contract, which entails the base rate of each employee. If the base rate is too low or does not meet the standards for the locale, the ability to attract good candidates will be low; therefore turnover will also be high. The company’s liability insurance must also be factored in. Be sure to include any verbiage that pertains to job requirements, it should be spelled out clearly as to what the guard is to do i.e. check all gates and doors every hour to ensure they are secure and report any exceptions to management.

In the final selection process the result in identifying two to three equally acceptable guard companies in terms of rate, support and other criteria. Tell all bidders you have narrowed the field to two, and it is only a matter of price and terms. Then negotiate with them to get the maximum terms. If one guard company really stands way ahead of the rest of the bidders, do not let this first choice company know they are the only company you’re considering. They will have far less incentive to lower prices or increase guard services to you.

Also, be careful not to lose any bargaining power by informing a bidder of your intent to sign with them before you have completed contract negotiations and checking their references. After the selection process, you may want let the bidder know that you have made a choice either verbally or in writing, but you should wait for the results of references and or background checks are fully known to you.

Never let the bidder know they are the only security contractor that can suit your needs or that you plan to use them exclusively. Doing so will allow them dictate all the terms of the contract. Don’t wait until the last minute to negotiate all the terms of your contract. Include key clauses in your Request for Proposal (RFP) that you want to include in your contract. Bidders are more likely to agree to your terms early, rather than during the final negotiation.

John M. Hewitt, CPP, CIPM, is a Certified Protection Professional and a Certified Institutional Protection Manager, and is a member of ASIS International.