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Clarion Group Managing On-Site Service Contractors

Kingston, NH, March 29, 2012 --( “The biggest mistake companies and institutions make when hiring a food service, janitorial, mail room, copy center or other vendor to perform services on their premises is to sign the contract, then put it in a drawer and forget it,” says Tom Mac Dermott, president of Clarion Group a dining and hospitality services consulting firm.

A good on-site services contract spells out each party’s responsibilities. Most important, Mac Dermott says, “is the description of products and services the contractor will deliver, including when, where and how.” But the contract is useless, he adds, if you – the person responsible for the services contracted – just files it away and don’t refer to it again.

“You can’t assume you and the contractor will recall each party’s rights and obligations in the same way,” Mac Dermott said. “The contractor’s manager and employees are human and, over time, may let some of the details of their responsibilities slide, so slowly that it may be imperceptible for some time. By the time you become aware of the shortcomings, the on-site manager may have changed and the new person assumes the services as provided are the acceptable standard.”

Take out the contract, he advises, and review it with the service provider’s on-site manager so that he or she understands what is expected and where the current performance is falling short. If that doesn’t get a satisfactory response, go up the chain of command to the manager’s immediate supervisor, usually called a district manager.

“If the district manager doesn’t produce a good result, it will be necessary to go up to the next -higher in the chain of command,” Mac Dermott advises. “And if that still doesn’t bring the service back to the contractually-required standard, it may be time to find a new contractor.”

The most effective contract administrators have a brief meeting with their on-site service providers’ managers daily, or at least a few times a week. This is especially important, Mac Dermott says, if the contractor’s responsibilities include a multiple of daily activities – catering, conferences, audio/visual services, for example – that vary from day-to-day.

“You can catch errors or misunderstandings before anything goes wrong,” he advises.

Most vendors bill for their services monthly. The invoices should be accompanied by a detailed statement of operations that lists services provided and itemized costs, whether billed on a per-unit basis or total costs plus fee. Even if the service, such as employee dining, is provided on a “P&L” basis (contractor retains the revenue and assumes the risk of profit or loss), the contract manager should receive the same detailed statement, Mac Dermott says.

“It’s a good practice to meet with the on-site manager’s immediate superior – usually called a district manager – when you receive the operating statement to review the results and resolve any questions or problems.”

“You’ll also want to meet with the next person up the chain of command, usually a regional manager or operations vice president, at least quarterly,” he says, “so that you remain in touch with the contractor’s upper management. These people have multiple responsibilities, usually involving fighting fires and soliciting new business. As a result, they’re reactive. If you leave them alone, they’ll assume all is well at your account and turn their attention elsewhere.”

Over the course of a few years, as circumstances change at an organization, the requirements for the on-site service vendor may change as well. These should be documented in amendments to the contract as they occur, Mac Dermott says.

“Every three to five years, it’s worthwhile to review the contract and its amendments,” according to Mac Dermott. “If there are more than five amendments, it’s advisable to rewrite the whole contract, incorporating the amendments, so that you have a single, comprehensible document to guide the service.”

About Clarion Group

Clarion Group is an consulting firm that advises companies, professional firms, colleges and universities, independent schools and institutions in the management, operation and improvement of their in-house employee/student dining, catering, conference, lodging and related hospitality services throughout the U.S. and Canada.

For information, contact:
Tom Mac Dermott, FCSI, President
Clarion Group
PO Box 158, Kingston, NH 03848-0158
603/642-8011 or
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Clarion Group
Tom Mac Dermott

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