Electricians, architects, engineers, designers, HVAC providers: these are just a handful of people with whom a facilities manager might work. These working relationships are hardly static, though. Your own requirements change just as vendors modify their terms and services.
What’s an FM to do in these situations? When looking for a new provider of any service, it’s wise to learn as much as possible about that vendor before signing on the dotted line. Here are 16 tips for vetting new vendors.
Review Their Work
Reviewing prior jobs and client testimonials is especially important when searching for a new designer, engineer or architect. The American Institute of Architects recommends that FMs examine the portfolios of these vendors carefully. When a provider’s work is visual, such as an architect’s, it’s even more crucial their vision matches that of the FM and facility owner.
Go to Trade Shows
To make valuable new connections, Karen Waksman at money and career resource The Balance says FMs should fill their calendar with trade shows.
“You’ll have the opportunity to see which suppliers take their market seriously, glean great information from one-on-one conversations with the sales representative, gain insight into the company and be able to instantly compare a variety of competitors,” Waksman says.
Send Qualification Surveys to Narrow down Leads
After going to all those trade shows, you’ll probably have a big list of prospective vendors. To cut down on these leads, business consultants ABC Group prefer to send brief email qualification surveys. This tactic takes little effort and can “quickly eliminate poor candidates, such as those that do not hold required industry certifications or are too small to meet your needs.”
Take a Tour of Their Building
Don’t jump the gun, even if you need to secure a new vendor quickly. Before making anything official, Jason Morgan at Fleet Equipment Magazine suggests touring the vendor’s facility. This gives you the opportunity to “see for yourself how organized they are, how clean the shop facility is and meet those you may be working with,” Morgan writes.
Hold an Interview and Double-Check References
Just as you would when looking for a new employee, take the time to have interview the vendor in person. And watch the references provided. Alexander Kharlamov at the Madison Square Garden Company tells Forbes Technology Council he cautions strongly against solely relying on a vendor’s references, as these are sometimes fake.
Rob Riester writing at LinkedIn agrees that FMs must perform due diligence. “Make some calls before you decide [to hire] — the references they give you will probably offer glowing reviews, so be sure to ask why and ask for examples,” he says.
Confirm Prices
Although this may seem like common sense, it bears repeating that an FM should confirm prices with the vendor before signing a contract, says Liang McIntosh-Yee at technology company Centreviews.
Ask if those prices are flexible and what might make them increase over time. While you can’t predict everything that could happen with a new vendor, this conversation gives you an idea of what to expect financially in the long term.
Don’t Forget to Discuss Extra Charges
You may have just negotiated the costs for service, but don’t stop there. James Leon at Journal of Accountancy reminds FMs to be aware of the potential for extra charges. For example, a facilities manager may see a fee increase if more employees use the service.
Yearly increases may be a factor and early termination charges might be levied if a contract is ended. Talk about these upfront so there are no surprises later.
Develop a Security Plan
Rachel Mosher at Commonwealth Financial Network recommends discussing security practices with potential vendors, when applicable. Service providers are usually companies with their own employees; you should be aware of their internal hiring processes and working procedures.
Mosher says to ask about physical security procedures too, including shredding and disposal procedures, for example, that reduce the risk of privacy breaches and unauthorized access to sensitive materials. By having security plans in place, these and other confidentiality issues can be addressed and avoided.
Bargain for More Than Price
Even if the price of a service is acceptable, the terms may not be. You should feel free to attempt to have those changed.
An FM “may…consider negotiating the delivery schedule or payment terms,” says employee scheduling company Homebase. “Even working together to find the best time of day to receive deliveries (i.e., not during the lunch rush) is an easy way to make your vendor work for you.”
Review Vendor Stats and Data
Visit each potential vendor’s website. There you should see all sorts of stats about the company that would be useful to an FM, Al Decker and Donna Galer at Chartered Global Management Accountant Magazine write. Look for information such as staff tenure, financial stability, management structure and customer satisfaction data including “references, social media reputation, and ratings by recognized accreditation services.”
Comb Through Testimonials
Heather Waters at marketing agency FreshAddress emphasizes the importance of a vendor’s reputation. To get a good idea of what a vendor’s customers think of them, check out their testimonials page. If they don’t have one, move on to social media and read customer reviews there. Beware of vendors that seem to have ultra-positive testimonials that seem a little too good to be true, as these probably are.
Tread Carefully with Newer Vendors
Newer vendors deserve a chance to prove themselves, but it doesn’t necessarily have to be with you. Associated General Contractors of America’s Fara Francis tells Associations Now she prefers a more established vendor.
What she looks for when choosing a vendor is: “longevity, how long the vendor has been in business doing this type of work, their depth of existence, the skill set, and how they portray their best practices.”
Order a Vendor Credit Report
Selecting a vendor is a long-term decision and can sometimes have major financial repercussions. Englewood Construction, a project management company in Illinois, told Entrepreneur they obtain recent bank statements, a record of insurance claims and credit report before signing on a subcontractor. While this kind of full-scale vetting isn’t necessary in many cases, an FM involved in retrofitting, renovating or in new building construction may wish to do so.
Ask about Support Services
Emergencies happen, as do unexpected incidents. Will your vendor be on-call in these situations? Don’t wait until you need them to find out. Tammy Cohen at employment screening company InfoMart says to discuss the vendor’s support features early on.
“Also consider whether a vendor outsources any part of his operation, which can impact how well you are able to work together and how fast or slow you are able to solve problems,” Cohen adds.
Ensure the Vendor Is Registered with a Local Association
It’s best if the vendor is registered with the Better Business Bureau, says Marketing MO. However, if they’re not, a local association will do.
“These types of sources will not only offer vendor listings, but often include background information, historical data including any previous complaints and grievances, and other details to help you get a better picture of potential vendors,” the company writes.
Preview Their Customer Service
If you hire this new vendor, you’re going to have to contact their customer service if you run into any issues. Don’t wait until you’re locked into a contract to discover what their customer support is like.
“Become a ‘secret shopper’ by calling their customer service line or emailing with a problem,” says Kelly Azevedo to Startups.co. “Evaluate response time, attitude of the support staff, how completely they answer an inquiry and professionalism. This is especially important if a vendor will interact directly with your audience at any point.”
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