Article
Enhance safety and mitigate risk by monitoring service contracts and controls
April 19, 2023 · Authored by Stephen Bacchetti, Colleen Rozillis, Isabella Risucci
Property owners and managers typically have a handful of core service contracts necessary for business operation such as janitorial, security, parking, and engineering. While these services typically don’t vary much between businesses, every building or operation has its own specific needs.
To enhance controls and mitigate risk in these core contracts, there are several steps property owners and managers can take:
- Assess existing contracts
- Identify the right key performance indicators (KPI)
- Monitor contract compliance and vendor performance to service level agreements
- Leverage current technology
- Add solutions to help detect and mitigate risk
- Incorporate environmental, social, and governance (ESG) goals into your contracts
- Hire experienced property management and contract compliance specialists
The scope of specific janitorial or security functions may differ from one owner or manager to the next, as do the controls and KPIs in these contracts.
Assess existing contracts
Your vendors are only as good as you make them. You hired them to be experts in their service areas and understand your unique business needs. You expect them to bring solutions and opportunities for increasing revenue and efficiency within your business. Unfortunately, not every vendor consistently delivers, and it’s important to know you can fall back on contract language if needed.
Understand what needs to go into your core contracts to be able to extract maximum value from the relationship. Quantify expectations such as defined minimum reporting standards, audit provisions, deliverables, standard forms, approval requirements, and even remedies for not meeting minimum service level requirements.
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