Recurring Contracts: What you don’t know does hurt you!

Recurring Contracts: What you don’t know does hurt you!

Keeping recurring contracts optimized at a building is not an easy task. Site personnel are focused on running the business rather than the building which is what they are supposed to do. As a result it’s not uncommon things slip through the cracks. How much? Anywhere from 20-40%. This includes services like janitorial, landscaping, heating and cooling, and any other regular service being delivered to the building.

In order to effectively manage this spend, this is what a typical checklist might look like:

1. Gather the baseline data

-What contracts are in place
-Who is providing the service
-What is the scope of work
-How much is being charged

2. Properly Document Services

-Review of the baseline data
-Preparation of standard contract terms
-Update scope of work to align with business objectives
-Document current charges

3. Prepare Procurement Cycle

-Prepare bid package
-Set bid date for services
-Invite bidders
-Receive bids
-Make awards

4. Calendar Recurring Competition

-Set contract end dates
-Set calendar reminders for bid event
-Repeat step 3 ongoing

You can get the idea pretty quickly why this is not the easiest process for the site to maintain themselves. It requires a bullet proof system, a great network of suppliers and tools to manage the logistics. Oh, and don’t forget time. Yes, they need time to do it along with all their other duties.  And if there’s not a system to share the information, everything can walk out the door when the branch manager is transferred, quits, or is fired.

Managing your recurring contracts effectively can result in huge savings!

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