The Do’s, Don’ts and Pitfalls to Avoid
Planning on appointing a new service provider for your building’s cleaning, security or catering? Hold it right there! It’s a good idea to exercise caution – after all, you’re going to be contractually tied to each other for the foreseeable future. Choosing the right contractor is essential to ensure quality service, cost-effectiveness, and the safety of your facility’s occupants. We’ve rounded up the best advice to apply to your hunt for a new contractor, as well as advice from a commercial law attorney.
Determine the Scope of Services Required
Before selecting a contractor, assess your needs and determine the scope of services required. This will help you identify the type of contractor required, the level of expertise needed, and the budget available. For example, a large facility may require a security contractor with advanced technology and expertise, while a smaller facility may only need a basic security service.
Research Contractors
Research potential contractors by checking their credentials, reviews, and references. This will help identify contractors with the required expertise and reputation for quality service. You should also ensure that contractors have the necessary licenses, insurance, and certifications required by law.
Keep your options open
Obtain multiple bids from different contractors to ensure you get the best value for money. It is crucial to compare bids carefully, ensuring that all services included are equal, and the pricing is transparent.
Verify Experience and Expertise
Request examples of previous work and references to verify experience and expertise. This will help you determine if the contractor has the necessary experience to meet their specific needs.
Ensure Communication is Clear
Clear communication is essential when working with contractors, so ensure that the contractor understands the scope of work required, the timeline, and the budget. This will help avoid misunderstandings and ensure that both parties are on the same page. Also, this is a good time to test out how they communicate with you, if they get back to you quickly, are polite and if you enjoy working with them.
Avoid Lowest Bids
The lowest bidder may not always provide the best quality service, and it may end up costing more in the long run. It is essential to choose a contractor who provides a fair price for quality service.
Check for Liability Insurance
Make sure that the contractor has liability insurance to protect the facility from any potential damages caused by the contractor’s work. Without liability insurance, the facility could be liable for any damages caused.
Avoid Contractors with Poor Track Records
No one wants to work with a contractor that has a history of delivering poor quality work or missing deadlines. Checking reviews and references can help identify contractors with a poor track record.
ADVICE FROM A LEGAL EAGLE
Commercial Law Attorney PJ Veldhuizen shares his advice on choosing the best contractor, and what Facility Managers should look out for before signing on the dotted line.
When hiring a contractor, what is the basic due diligence that should be done?
Ask for references (and actually follow them up), find out what insurance they carry and ask for permission to perform a credit check. Check their certification such as their tax clearance and solvency certificates, and lastly, ensure they have their professional registrations and licences (for example, a security company should be PSIRA).
What are some of the red flags to look out for?
If they cannot produce any of the above documentation, or prevaricate on why it isn’t available, that is a huge red flag.
When it comes time to sign the contract, what should the hirer be looking for?
Unless the hirer has in-house counsel, the contract should be reviewed by a commercial attorney. Unfortunately, a layperson (and even an experienced business person) cannot be expected to appreciate the nuances of these types of agreements. There is a reason that the average textbook on the Law of Contract is over 500 pages long and refers to a multitude of decided cases on the concepts discussed! The wording and the implication of the wording in contracts is often more complex than a simple plain reading lets the reader believe.
What are the common mistakes that people make when going through the contract?
The dispute resolution clause is very important – set the rules of the fight before it occurs, including indemnities, suretyships, guarantees and warranties.
