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Choosing third-party vendors

Whether you need grounds maintenance, snow removal or transportation services, chances are your organization has to work with a third-party vendor. It is always a leap of faith to hire another company, especially if the people you serve will depend on that company as much as they depend on you.

Here, Church Mutual offers some advice on choosing and working with third-party vendors.

Consider every aspect of a service’s cost. It is easy to simply accept the lowest bid for a job. But in many cases, the cost of a particular service goes further than the initial bid. It also includes the amount of time it takes to complete a job, the skill of the workers and the likelihood of the job being done right the first time. Additionally, there is value in peace of mind – a more expensive vendor might also be more experienced and less likely to commit an error.

Find a vendor that has a proven track record. The idiom “You get what you pay for” has become popular for good reason. If you find a vendor whose prices are significantly lower than others, take a good look at that company’s body of work. Spend time talking with the vendor’s other customers and consider what aspects are important to you. Third-party vendors should have a reputation for a robust safety culture and be able to demonstrate risk prevention protocols like a “hot work” program to prevent starting fires when using torches and other equipment that produce flames or high levels of heat. They should also be properly licensed and insured. More than anything else, you should have faith the company you hire will get the job done without putting your people or property at risk.

Place a strong emphasis on communication and timeliness. Is the vendor you’re considering easy to reach? Or does the company often wait more than a day before returning a call or email? Whether you are hiring a company for property maintenance or something else, timeliness is important. If you can’t trust the company to respond quickly during the hiring process, you can bet it won’t respond quickly when you need it, either.

Look for a company with a reputation for being honest and fair. Check references with other organizations where the vendor has performed work and research if any complaints have been filed with the Better Business Bureau (BBB). In addition, performing a Google search can go a long way toward showing you the character of the company you are considering. It will help you discover whether the company has experienced scandal, if it has undergone frequent ownership changes, etc. Social media can also be a useful tool and give you a good idea of what people are saying about a particular vendor.

Use a written agreement once you have made your vendor selection. To minimize your organization’s risk, avoid “handshake deals” and formalize the relationship with a written agreement. In addition to specifying terms such as the scope of work, timing and cost, consider including applicable hold harmless and/or indemnification provisions and insurance requirements. If included in the agreement, follow up to make sure the vendor has named your organization as an additional insured on its policies.

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