Tips for adopting a best-value security and procurement approach

As a result of economic pressures, many companies often procure goods and services on a strictly low-price basis, oftentimes ignoring experience and past performance and failing to take into account necessary best practices when looking at specific services. Physical security for instance, is an area where services cannot be based on the same cost criteria as the purchase of material goods. The idea that purchasing security services equates to the purchase of desktop computers is fundamentally flawed. To win and maintain low-bid contracts, service providers must reduce their own costs, which often mean cutting corners that result in sub-par security and increased liability. So how do companies get the best value for their yearly security services expenditure? The following recommendations will put you on the right track: Change your model Adopt a best-value approach vs. a low-cost procurement approach to contracts for services. Low-cost procurements award a contract to the service provider submitting the lowest bid. This procurement approach is an effective tool when purchasing commodities. The best method to adopt when services are an important component to the property is to identify a full set of bid evaluation criteria, in addition to cost, which will benefit the organization. It is critical that quality indices outweigh price as a means to obtain the best value. This is important because measuring the quality of services like security is a subjective process. Obtain top management support Experience has shown that senior executive buy-in is required if quality procurement is to succeed. Executive support should be obtained early, and frequent updates are necessary to ensure timely and realistic decisions. Develop clear procurement policies and goals Establish policies and objectives to provide guidance in the use of best-value acquisition methods. A company may have a goal to upgrade the quality of personnel assigned to their facility. With this goal, your RFP should require responders to clearly describe their staffing methodology, supervision structure, management experience, training programs and compensation and benefits offered to the security personnel. These items will impact the caliber of individual the security firm will be able to attract and retain. Ensure that the relationship between the purchaser and the seller is mutual No contract that proves unsatisfactory to the security contractor can be regarded as satisfactory to the buyer. It is often the case that a buyer will attempt to leverage the volume of the contract which the security service provider should be willing to compromise price without compromising quality. Unfortunately, this is a fallacy. The reality in a service-based industry is that you can't compromise on cost and still maintain quality. A security service provider should only be willing to compromise profit, not process. This is a critical distinction. Low bid service providers will cut corners on their program to win the bid. Use experienced qualifiers It is to a company's advantage to identify only qualified bidders. Therefore, requiring certain levels of experience or proven capabilities on the part of the bidder is a valid means of qualifying prospective providers. This may take several forms: * Successful past experience on contracts of similar scope * Staffing methodology * Experienced, certified instructors as trainers * Detailed training programs * Overview of supervision structure and management experience * Pay rates and benefits to personnel Develop detailed evaluation criteria and methodology The importance of detailed evaluation criteria is critical. It is through detailed evaluation criteria and methodology that companies can ensure they select the best-value bidder rather than the low-price bidder. These criteria provide companies with a powerful tool to break the low-bid cycle of failed deployments, renegotiation and ultimately, higher costs. This can only be done with detailed information made public in the RFP. This also allows service providers to design their solutions around what is critical to their security programs. Look at other value-added services Consider the benefits of a single point of contact managing one multi-service relationship. When evaluating security services, oftentimes an end-user can increase the value of the relationship by having the security provider assume responsibility for other functions in addition to the typical security responsibilities. This may take the form of having the security personnel manage the ID badge program, providing receptionist services, completing fire extinguisher inspections, shipping and receiving functions and many other services. Your company can potentially save time and money by having the security provider perform these duties, as well as ensuring the security personnel remain busy and challenged on their shift. This can only be achieved if competent, quality personnel are present. Summary Early on, best value procurements can be time consuming, as evaluation criteria is assessed. However, the benefits in terms of reducing liability and protecting people and assets are worth it, resulting in long-term partnerships and the best value for your security dollar. John Kozak is vice president of business development for SSC, Inc., Shelton, Conn.John Kozak, SSC, Inc.