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SELECTING THE RIGHT contract security service can be one of the most difficult and perplexing decisions you have to make. With virtually all security service contractors claiming to offer the best screening, training, supervision, and personnel, all at the best price, the decision can be overwhelming.

Not surprisingly, general criticism of security service contractors consistently centers on these same issues. Clients often complain about the lack of officer training, poor management response to client problems, inadequate personnel screening procedures, and less-than-professional attitudes of security officers.

How do you, a user of contract security services, select qualified companies to bid on your jobs? How do you fairly evaluate all proposals and select a company that gives the best service for the dollar? Finally, how do you provide the monitoring necessary to ensure you are getting your money's worth?

The following is a guide to selecting contract security services. Because of the nature of this issue, however, consult your legal, financial, and insurance resources with questions on any points. This guide is not intended as a substitute for such consultations.

The first step is preparing for bidding. In most instances, users of contract security services are looking for five major qualities in a contractor--trained and reliable personnel, responsive contract management, proper supervision, quality job performance, and competitive pricing. Finding a security contractor with all five characteristics is difficult even for seasoned professionals. For less frequent users of security services, the task can quickly become a frustrating exercise that results in the selection of a contractor that may or may not be best for the job.

As with any purchase, the adage "you get what you pay for" certainly applies to security services. Undoubtedly, a security contractor can attract and retain better qualified personnel for a salary of $7.00 per hour than for a salary of $3.50 per hour. No one wants to overspend, however, and there is a point at which you may do just that.

How, then, can you be sure you are getting the best security service possible for each dollar spent? Although any number of factors improve your odds of selecting the right contractor, several key steps give you a decisive edge.

Carefully choose the companies from which you request bids. Soliciting bids from a firm that is either underqualified or overqualified is a waste of your time and the contractor's. Take the time to get to know your prospective vendor's operating philosophy. Carefully review its experience, reputation for service, references, and financial condition. Evaluate its personnel procedures, training programs, and operating capabilities. Finally, determine if it has the caliber of management staff that can quickly and professionally respond to your security needs.

Define, up front and in detail, what you expect from a contractor. Be candid about the performance levels you require and the repercussions for poor performance. Most security contractors honestly want to give you the degree of service you want. They can only do so, however, if you communicate your expectations from the start.

Set a specific minimum salary and benefits package for personnel assigned to your facility. This action not only indicates your overall concern for security but also gives you a basis for an apples-to-apples comparison of contractor costs when the bids are in.

Solicit bids through a detailed set of written specifications. This document establishes your standards for screening, training, salaries, benefits, supervision, and performance. It further ensures that contractors understand your requirements.

Clearly state that you intend to check up on the contractor periodically to ensure it is meeting your standards. Let it be known that you not only wish to participate in selecting individuals assigned to your facility but also will spot-check personnel to evaluate their capabilities. A contractor who knows you will remain involved makes all the more effort to supply personnel who meet your standards.

Clients who carefully screen potential contractors and adequately define their standards select contractors who provide satisfactory service. The key is simple--you as a user must become involved in selection. After you choose a contractor, you must provide consistent feedback to ensure that standards are maintained.

ONCE YOU HAVE DECIDED TO USE a contract security service, you need to know where to begin. The first and most often overlooked step in selecting a contractor is to conduct a thorough survey of your site's physical security. Understanding precisely what you need is imperative. Equally important is understanding how a security service will function and how compatible it is with existing security measures. Ignoring these factors may lead to selecting a security service that directly conflicts with your other programs.

A security survey is a comprehensive examination of facilities, work systems, and related procedures for the purpose of

* determining the existing state of security.

* identifying your site's vulnerabilities and threats,

* evaluating the likelihood of occurrence,

* establishing the level of protection required,

* developing and recommending cost-effective security measures, and

* implementing needed changes.

A comprehensive survey addresses a variety of issues in detail. As a general rule, a survey should assess and provide recommendations on the following points:

* perimeter security--natural and structural barriers, fencing, clear zones, trespassing signs, doors, and windows

* protective lighting--exterior, interior, and emergency

* locks, locking devices, and containers--key and lock control, safes, vaults, file cabinets, and special equipment requirements

* intrusion detection systems--alarms and closed-circuit television

* access control--personnel, vehicle, parking, and computerized systems

* identification media--company ID cards, access cards, and photo ID systems

* product and material controls--shipping and receiving, property pass systems, accountability systems, and warehouse and storage

* proprietary and sensitive information--classification, storage, accountability, reproduction, and destruction

* communications -- methods, backup, and countermeasure requirements

* computer and EDP security--access, controls, protection, and duplicate storage

* security officers--deployment, use, duties, functions, training, supervision, and competence

* security planning--site security and emergency action plans

* contingency planning--bomb threat, fire, natural disaster, civil disturbance, and sabotage

* security awareness and training--reporting of losses and employee education

* policies and procedures--existing and required

Depending on the facility, other topics of special interest may be included in the survey, such as executive protection, cash handling procedures, preemployment screening, and hiring practices. Often, the needs of a facility require a review of some unique aspect of operation. Once you fully understand your existing program's strengths and weaknesses, security measures can be designed to complement and enhance it.

In conducting a site survey, using an outside consultant is highly recommended, provided, of course, that you do not have the in-house capability to do one. Most security service contractors will perform such surveys at your request. A word of caution, however: If you elect to use a security contractor, make your selection strictly on the basis of the contractor's consulting expertise. Keeping your bid for contract services separate from the survey consulting contract is important.

After you have determined precisely what you expect from your contractor, the number of personnel required, and their specific responsibilities, you can begin the process of identifying potential vendors.

EVALUATING SECURITY contractors is the next step. At this point you are probably asking, "Where do I find good security contractors?" To select the best companies to submit bids, you must first identify contractors most likely to provide the quality and type of service you require.

As with any service contractor, simply picking a name from the phone book is rarely the best approach. Instead, consider contacting industry affiliates, management organizations, and local agencies for referrals. You can usually obtain unbiased recommendations on several reputable companies. Sources available include but are not limited to the following:

* members of the American Society for Industrial Security (ASIS)

* the Building Owners and Managers Association (BOMA)

* American Commercial Real Estate (ACRE) or International Real Estate Management (IREM) contacts

* the local Chamber of Commerce and Better Business Bureau

* local law enforcement agencies

* state regulatory agencies such as the Texas Board of Private Investigators and Private Security Agencies (TBPIPSA)

* other industry associates or contacts

After obtaining recommendations, you can invite several of the recommended companies in to discuss their firms. You should expect professional presentations that reflect the well-run organization you are seeking.

The goal of your initial meeting should be to learn as much about a vendor and its operating philosophy as possible. Require a contractor to furnish prepared materials for the meeting, including the most recent annual report or financial statement, organizational charts, client listings, appropriate sales brochures, and any other material you feel might be useful in your evaluation.

A logical question at this stage of the process is, "What should I know about the contractor?" In selecting a security contractor, you should remember one vital point: The more time and effort you spend selecting your contractor, the greater your chances of choosing a firm that lives up to your expectations. Selecting a poor contract security service can be a source of great frustration and embarrassment, while choosing a top-performing contractor can be a feather in your cap. Given that, it is in your best interest to devote sufficient time and energy to ensure that the proper selection is made.

In your initial meetings and your review of each vendor's literature you should resolve several key issues, which include

* vendor operating philosophy and attitudes;

* vendor compliance with state licensing and regulatory requirements;

* types and levels of insurance policies in effect or available;

* depth, availability, and experience of management;

* size, experience, and turnover rate of the work force;

* types of employee benefit packages provided and at whose cost;

* minimum wage scales and merit increase program;

* uniforming procedures and costs;

* personnel screening and testing procedures;

* officer and supervisory training programs;

* operational capabilities;

* supervision methods;

* financial condition and length of time in business;

* auxiliary services available;

* billing procedures; and

* client and reference listings.

If, after examining this information, you think a contractor is a satisfactory bidder, arrange for a tour of its office. Also visit at least two current clients with operations similar to yours.

In touring the contractor's office, look closely at its uniforming capabilities and stock. Question the personnel department about its screening and hiring practices. Have the operations department give a summary of the organization's personnel selection, training assignment, and supervision programs. Review payroll procedures and billing requirements with the accounting department. Sit in on an officers' or supervisors' training session.

In conducting a site visit, look closely at officers' appearance and demeanor. Quiz them on their responsibilities and attitude toward their employer. Visit with a client and obtain his or her opinion of the security service. In summary, make certain you are comfortable with the contractor and confident it can do the job you expect if selected as your vendor.

ONCE YOU HAVE IDENTIFIED A POOL of contractors that meet your expectations and that you wish to receive bids from, the next step is to issue invitations. Without a doubt, this is the most crucial step in selecting a quality contractor. It is extremely important that you issue a detailed set of written specifications for vendors to follow. This is your opportunity to communicate minimum standards for personnel, training, benefits, supervision, and a host of other requirements.

Just as your involvement in the screening process affects the quality of the vendor selected, the specifications you issue determine the quality of personnel and service you receive. Specifications should address the following:

Wages. Establish a specific minimum salary to be paid each employee assigned to your facility, as mentioned earlier. This specification primarily determines what you will pay for service, and, more importantly, the caliber of personnel you receive. As a general rule, 65 to 70 percent of a contractor's billing rate is paid out as salaries to individual officers. If you pay a contractor $6.00 per hour, you can estimate it is paying officers $3.90 to $4.20 per hour.

People often argue that you should not or cannot dictate the salary a contractor pays his employees. You may feel it is a contractor's responsibility to determine what pay rate is best for you. However, remember that of all the cost factors included in a bid, officers' pay rate has the biggest impact on your final billing rate. Also, your intent is not to dictate salary but to specify the minimum salary level you feel is adequate to attract and retain the quality of personnel you desire.

The absence of such salary guidelines will nearly always result in your receiving bids that are difficult to compare fairly. One contractor may propose to pay officers $4.50 and bill you $6.00 per hour. Another contractor may propose to pay officers $5.25 and bill you $7.00 per hour. If you aren't aware of the differences in proposed pay rates, you may simply reject the $7.00 bid because it's too high. In doing so, you may fail to recognize that the more expensive contractor will supply higher quality personnel and probably a lower turnover rate.

Again, simple guidelines specifying a starting pay rate ensure that you obtain comparable bids. Remember, you're not locked in to the amount you specify. You can increase or decrease your standards during negotiation and at the contractor's recommendation. Finally, require a merit pay increase proposal from vendors. Periodic pay increases attract quality personnel and further assist in reducing turnover.

Benefits. Outline a benefits package and expect a contractor to provide it for officers assigned to your facility. In concert with wages, a benefits package for officers is a major factor in reducing turnover. You cannot attract and retain qualified personnel without competitive benefits. Include health coverage, hospitalization, vacation, holiday pay, sick leave, and furnished uniforms in your requirements. Such benefits boost morale and give you an advantage in maintaining a stable work force.

Personnel screening standards. Establish standards for contract employees at your facility. Doing so not only reduces your liability but also ensures that the contractor you select provides the caliber of personnel you want. Your specifications should include experience and education required; oral and written communication skills; absence of a criminal record; eligibility for licensing; psychological or honesty testing; thorough background investigation; health and medical standards; and any other requirement you feel is warranted.

Training. Provide a detailed summary of what you feel are the minimum security training standards required for both officers and supervisors. Specify subjects to be covered and hours of instruction to be devoted to each. Define any unique training you desire, such as state certification, first aid, CPR, or site-specific instruction. Require that vendors develop a site-specific testing program to periodically assess officers' competence.

Uniforms. Specify the type of uniform to be worn at your facility. Require that the vendor provide initial and replacement uniforms at no cost to employees. Custom tailoring and cleaning should also be furnished. Your guidelines ensure that officers assigned to your facility maintain the image you desire.

Insurance. Include your requirements for comprehensive general liability, automobile liability, umbrella coverage, workers' compensation, and any other policies necessary. Require evidence of coverage naming you as an additional insured party, and include a 30-day notice-of-cancellation clause.

Vendor history. Ask vendors for a detailed history of their operations. Specify an amount of time a vendor must have been in business. Require documentation of agency licensing. Request the most recent annual report or financial statement, as well as lines of credit available. Require a client listing and verify it.

Management and supervision. Require biographical data on contractor management. Specify the type, degree, and frequency of on-site and unannounced supervision and inspection you require.

Cost disclosure. Require a detailed and accurate cost disclosure to demonstrate how your billing rate is determined. Disclosures should, at a minimum, specify all costs related to payroll administration, scheduled and unscheduled overtime, training, uniforming, equipment, insurance, benefit costs, general and administrative costs, and net profit. Define billing procedures to be followed, and require the insertion of a right-to-audit clause.

Other. Provide additional information to ensure that vendors clearly understand your requirements. Specify the number of personnel you require and the hours of coverage necessary. Define the duties and responsibilities of assigned personnel. Identify any equipment you may need, such as a patrol vehicle, radios, or watchtour system. Specify whether officers are armed or unarmed. State any other services the contractor may be required to provide, such as investigations, consulting, or drug testing. Include any other specifications unique to your facility or that you feel are important.

Once you have issued bids, consider hosting a prebid conference for all potential contractors. This will give you an opportunity to review your requirements in person and answer any questions contractors may have. Changes in bid specifications that result from the prebid conference should be documented in writing to all vendors following the meeting.

Finally, establish a reasonable deadline for contractors to return their bids. If possible, allow at least 10 working days to give vendors time to address your requirements adequately. Extremely large or complex jobs may require even more time.

AFTER YOU RECEIVE BIDS, YOU MUST begin the meticulous process of comparing proposals. Begin your evaluation by looking closely at the bid package. Did the vendor provide all the information requested in the proper format? Evaluate the quality of the proposal. Did the vendor follow directions? Was the proposal submitted on time?

While these may seem like minor points, the care with which a vendor responds to your specifications often reflects its general attitude. Careful attention to detail reflects both an interest in your contract and a general understanding of your written requirements. Poor response should warn you that a contractor may not be able to follow through on more complex issues.

In evaluating bid content, compare the following:

* personnel screening and selection process--vendor standards, employment and reference checks, psychological and honesty testing, and background investigations

* training programs--orientation, onsite and refresher training, written testing requirements, state-certified training school, and classroom instruction

* methods of supervision--site and field inspections, visits and assistance, depth and availability of management, written testing

* employee benefit packages--uniform provision, vacation, sick pay, major medical, hospitalization, insurance, profit sharing, cost to officers versus cost to vendor, and wages

* insurance--general liability, workers' compensation, automobile liability, health care, employee dishonesty, umbrella, exclusions, notifications, and self-insured provisions

* operations capabilities--response capabilities, standards, post order preparation, degree of client control, 24-hour/365-day operations department, and management response

* vendor history--average length of service for both hourly and management personnel, management experience levels, length of time in business, work history, financial stability, and references and client listings

* other services--investigations, polygraph, physical security consulting, special services, honesty testing, and drug and alcohol abuse programs

* cost--degree of cost disclosure made, overtime rates, percentage of general and administrative costs, profit margins, methods of billing, right-to-audit clause, proposed wages, and merit increases

When comparing bids, remember that cost should not be your only consideration. All reputable contractors must make a profit to handle your account properly. Bids that reflect no profit or a profit of 1 or 2 percent may well be attempts by a vendor to sacrifice all to get your account. This approach often results in the selection of a vendor who has difficulty servicing your account or meeting your standards.

While cost must be a consideration in contractor selection, the issues raised above should be given significant weight in your decision. The contractor with the lowest bid may or may not meet your needs.

AFTER YOU HAVE MADE YOUR decision, you must award the contract. Obviously, only one vendor can win. You should realize, however, that your responsibility to select a qualified vendor extends beyond notification of your chosen vendor.

Do not fail to notify the firms you did not select. They devoted a great deal of their time and energy to your project and most certainly deserve the consideration of a phone call. Far from being upset, vendors not selected will appreciate your taking the time to let them know that they were not chosen and why.

You must now begin contract proceedings with the successful vendor. Contracts should include the following provisions unique to a security service contractor:

* length of contract and renewable periods

* starting date

* terms of payment and billing requirements

* 30-day cancellation clause as a right of either party

* client's inclusion as additional insured on insurance policies

* equipment costs to be billed

* right of client to remove or replace any contract employee

* right of client to approve contract employees assigned to its premises

* supervision and management requirements

* paid holidays, sick leave, and vacation provisions

* right-to-audit clause

* benefits for contractor's employees

Quality security contractors will be willing to work with you to resolve issues important to both sides. You should not accept any unresolved details. Bear in mind that your needs as the client are primary. If in doubt, allow legal counsel for both your firm and the contractor's firm to resolve any contractual issues that may surface.

As you begin coverage with a new contractor, how do you monitor and assess its performance? Initially, you should meet with the contractor's operations representatives to make your requirements final and establish a plan for carrying out the service. Require the contractor to prepare and submit for your approval written post instructions for every security station or patrol.

In working with the contractor's personnel, remember that good contractors normally have several levels of operations supervisors. Make certain you relate to and have confidence in the representative you have been assigned. Contractors readily recognize that some personalities are not good combinations. If you are uncomfortable with your representative, ask for a change.

Allow your contractor to give you service. After all, you are paying for the extra attention your account may demand in the beginning. At this point, you should be working with operations, management, and security personnel. You should also be asking yourself a few questions. How well does the company respond to your needs and special requests? How well are the security officers trained and supervised? How often are inspections done by management? Are the security officers performing to your expectations? Is their appearance satisfactory?

Ask the contractor to develop and implement site-specific testing for security personnel, allowing you the opportunity to review test results and revise the program to meet your needs. The results may give you a much better idea of how well oriented your personnel are. Test results also will help you identify procedures in need of revision.

Once you have determined that all procedures are satisfactory and that operations and management are responsive to your needs, you can rest assured that you made a good decision. The amount of follow-up monitoring required after the first quarter is your decision. Once guidelines have been established, you may reasonably expect good service to continue for years. There is no reason why you cannot continue to guide the vendor with relatively little effort.

Good security is a long-term investment. Provided you have been an informed buyer, the quality of service received should easily match the dollars invested. A good security services contractor expects to give what the name implies--service. You, as the client, should accept nothing less.

Vicki S. Looney is director of sales and marketing for ABM Security Services Inc. in Houston. Terry F. Whitley is general manager of American Consulting and Investigative Inc. also in Houston. Both are members of ASIS.
COPYRIGHT 1990 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:selecting a contract security service
Author:Looney, Vicki S.; Whitley, Terry F.
Publication:Security Management
Date:Feb 1, 1990
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