How Can I Manage Our Outside Contractors Successfully?

When facility managers work with outside contractors, there are several factors to consider to ensure the highest level of success.


https://facilityexecutive.com/2019/02/manage-outside-contractors-successfully/
When facility managers work with outside contractors, there are several factors to consider to ensure the highest level of success.
Facebooktwittergoogle_plusredditpinterestlinkedintumblrmail

How Can I Manage Our Outside Contractors Successfully?

When facility managers work with outside contractors, there are several factors to consider to ensure the highest level of success.

How Can I Manage Our Outside Contractors Successfully?

By Robert Brieck 

Facility managers will likely come across the need to hire an outside contractor at some time during their careers. Engineering, welding, design, and electrical work are just a few areas of expertise that warrant short-term, yet highly qualified skilled workers. To ensure the highest level of success in working with an outside contractor, there are several factors to consider.

Identifying Contractors

One option for screening potential candidates or organizations for contract work is working with an agency. Agencies can recruit independent contractors with the background and experience needed, or may choose from candidates already contained in their database. One can also coordinate directly with “job-shoppers” or contractors specializing in the type of services sought after.

Some companies have a Collective Bargaining Agreement (CBA), which is a commercial agreement between an organization and its employees represented by an independent trade union. A CBA regulates the terms and conditions of employment such as wages, benefits, and more. If this is the case, and the outside contractors will be performing similar work activities as those defined in the existing CBA, one should refer to the agreement regarding temporary employees or contracting out work. It may also be beneficial to host a formal discussion with human resources and union representatives in order to address membership questions as they arise.

Detailing Expectations

If it hasn’t been done already, determine the total anticipated cost of the project that requires contract work as well as an estimated length of employment. Options may be limited in terms of in-house personnel due to specific skill sets, time-frame required to complete the project, or the ability to utilize overtime (OT) by existing staff. If so, consider developing a Statement of Work (SOW) for contractors.

A SOW will provide both the organization and its contractors with the foundation for the contract in addition to a document that serves as a means to evaluate the contractors’ performance. Language contained in the SOW should be clear and concise, yet sufficient enough to cover the following topics:

  • Manager: Identify the individual the contractor reports to in addition to individuals who may direct the contractor
  • Location: Provide a location where the work will be performed, and be as specific as possible to eliminate any potential confusion
  • Scope of Work: Provide a description of the work to be completed
  • Schedule: Include a timeframe that depicts when work should start and finish, incorporating:
    • Milestones and indicators of what should be completed and when
    • ‘Drop dead date’ or last possible date on which project must be completed
    • Appropriate consequences for missing deadlines
  • Key Performance Indicators (KPIs) or Service-Level Expectations: Present clear objectives used to measure success
  • Deliverables: Generate list of things that will be produced as a result of the contract work being done; could include specific documents such as submittals for approvals and parts
  • Equipment/Supplies: Outline individuals responsible for supplying equipment and materials; specify materials desired
  • Facilities: Detail any facilities the contractor may use including parking, access, copiers, restrooms, etc.
  • Reports: Outline types of reports to be furnished, individuals responsible for providing report, recipients of reports, dates reports should be provided, and desired formatting
  • Pay Rate: Provide a pay rate, typically at an hourly or a time and material value; include the approximate length of time expected to be involved
  • Total Funds: Include a maximum expenditure for the project/work which should not be exceeded
  • Payment Terms: Outline payment terms that compensate only for milestones achieved with supporting documents and deliverables

These topics, at a minimum, should be included in a SOW to help ensure success. It’s also important to include both non-collusion and damages statements. Damages may be compensatory, consequential, liquidated or punitive damages, if necessary. Finally, address documents required to prove citizenship and the ability to work in a specified facility. Once developed and discussed with the short-term worker/contractor, both parties should sign the Statement of Work.

Measuring Performance

It’s best to evaluate contractors on the basis of agreed-upon KPIs, contract language,  service level definitions, and procedures and policies that encourage success. When establishing KPIs for this purpose, a quantity of 5-10 indicators should be sufficient to measure a contractor’s success.

Ensure KPIs accomplish the following:

  • Identifies a specific objective to be met
  • Defines methods and values used to measure progress
  • Assures each objective is attainable and realistic
  • Maintains relevance to the business
  • Sets a specific timeframe applicable for each objective

outside contractorContract language should be clear and concise, yet allow adjustments in the event of changing priorities. It should provide flexibility by both parties to adjust for unforeseen circumstances. Language within contracts shouldn’t be the only form of communication used to manage expectations between a contractor and its employer. In addition to signing necessary contracts, arrange face-to-face meetings where both parties can ask questions.

Offer flexibility in terms of performance measurement. Differentiate between critical elements (most important objectives) and non-critical elements (objectives holding less importance). For example, a contractor that fails to deliver excellent performance on a non-critical element shouldn’t necessarily warrant immediate penalization. Using performance measurements when adjusting future expectations is also key.

Service levels, which can be used to measure performance, may or may not be applicable to the contract. If utilized, service levels should be developed in accordance with the contractor’s specific skill set. In other words, the independent contractor should be able to apply their skills and expertise in order to achieve the respective service levels. Detailed specifications may be included, which even further outline levels of service. A common example of a service level is the percentage of calls answered in a call center.

Each company’s unique set of procedures and policies plays a critical role in that organization, regardless of its mission. Procedures are the methods used to enforce policies, or the regulations within the organization. Procedures and policies are put in place to govern the day-to-day operations of an organization, and outline responsibilities for the both the employer and its employees. Contractors are no exception to this rule—procedures and policies should apply to all workers, both short-term and long-term.

Weighing the Benefits

One may ask why it’s necessary to take on such an active role in managing a contractor who will perform services for a limited time period, but there are numerous advantages. First of all, it will be easier to determine how a contractor is performing based on objectives outlined in the SOW. In the event a project has gone off-course, the necessary and actionable steps to take in order to get back on track will be more obvious. Also, reporting to other individuals, whether internally or externally, on progress being made will be extremely clear-cut. Finally, setting a standard and compiling information for future contractor needs will prove beneficial in the long-run.

Partnering with contractors is key. Keep in mind that contractors have a vested interest in success, much like their employers.

Robert Brieck is a professional services consultant for DPSI, a computerized maintenance management software (CMMS) software company. He has over 40 years of experience as a senior level maintenance administrator at a number of organizations, most recently with the Community College of Allegheny County. He has also worked as an instructor for both public and private institutions.

Do you hire outside contractors to work at your facilities? What are some of the pros and cons of doing so? Please share your thoughts and experiences in the Comments section below.

Suggested Links:

LEAVE A REPLY