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Guidelines for Outsourcing Contracts
OTHER PARTS OF THIS ARTICLEPt. 1: Ten Reasons for Outsourcing FailurePt. 2: This PagePt. 3: How to Measure a Contractor's Performance
For any outsourcing contract, each item in the statement of work should include a method to measure the contractors' level of performance. To make my point, let's look at examples outside of facility maintenance, which typically is more complicated to outsource.
Consider these housekeeping and grounds care requirements: Housekeeping crews will maintain bathrooms in a clean fashion. Mirrors will be smudge-free. They will clean windows in a manner appropriate for the building. They will dust all structures and furniture regularly. They will dress appropriately. Grounds crews will weed and prune flower gardens regularly. They will maintain grounds in acceptable condition.
I have seen all these statements many times over the years. Each time, I would raise my hand in the bid meetings or respond in writing, asking for clarification of ambiguous terms. Rarely, if ever, did I get a measurable answer.
So these unmeasurable requirements raise these questions among contractors:
- How do I price the work?
- How do I organize and staff my employees?
- How do I measure my performance?
- More importantly, how does it apply to my profit picture?
- How do I ensure my bid and business plan are comparable to other bidders?
The answer to the last question is, it's not possible. Managers who bid out custodial work to three or four reputable contractors probably will end up with a consensus on the way the selected contractor should maintain the buildings and the appropriate price of the contract, without too much hand-wringing.
Now let's complicate the discussion considerably by returning to the maintenance outsourcing arena. If we cannot define whether or not a bathroom is clean, how is it possible to define words such as maintain, fix, repair, inspect, monitor, or perform? The answer is, we can't. This is the reason the maintenance outsourcing business has struggled, and the probability you will renew the maintenance contract at the end of its term is very low.
In short, if you do not understand the scope of work to be outsourced, how is it possible to understand the contractor's performance?