13. CONTRACTING
Every communications manager must purchase a variety of services. He must also decide on a continuing basis when to use staff resources and when to contract – whether to “Make” or “Buy”.
1. Types of Contracting
Communications managers must make contract decisions on a wide range of tasks, including:
2. In House or Outside Services
The two major considerations are:
- Quality of Product
- The Economics of the Decision
Analyse the requirements. Decide which can and should be done in house. Decide which should be contracted out. Your criteria: Quality and Economy.
Generally, use staff people when:
o the task to be done is steady and continuing
o it requires an intimate knowledge of the organization and its goals
o there is confidentiality or security involved
o the job requires someone’s continuing presence on
premises
CONTRACTING (cont’d)
Contract out when:
o the volume of work is low
o the work is short term or has seasonal fluctuations
o variety is a necessity
o special expertise is required
o special equipment or large capital outlay would be needed t do the job in house
Review – requirements change. Re-assess your program ever year and adjust your approach accordingly.
3. When to go to tender
Contracted services may be obtained by direct purchase or through competitive tender. Generally, you will consider direct purchase when:
- The job is small. Do not call tenders on a $500 assignment.
It will waste your time and cost you money.
- Unique expertise is required
- Quality is more important than price
- The job is rush
Examples: specialized writing, photographers, translations
You will consider competitive tender when:
- the job is a big one and price variations can be significant
- no unique expertise is required
- the job is fairly specific and mechanical
- there are a fair number of competent practitioners in the field.
Examples: typesetting, printing, film production.
CONTRACTING (cont’d)
4. Some general rules for Contracting
Whether you contract direct or through tender, you should know the following information.
Know your market. If you contract regularly for a particular service, you, or someone on your staff, should know the suppliers:
- how many are there
- where are they
- what is their specialty
- what is their track record
- how reliable are they
Keep files. Keep a record of performance. Learn from your mistakes.
Know the going rates. You or your staff should know roughly how much you should pay for a writer, a photographer or a mailing list. Keep your suppliers honest. Even the tendering process is not infallible. Sometimes, all the bids are too high.
Know the whole market. Do not just focus on local suppliers. Many jobs can be done as well or better by suppliers located elsewhere.
Be specific and thorough. Do not assume your contractor can read your mind. Make sure he has all your specifications, including:
- your message
- quantities
- quality of materials
- deadlines
- formats
Most mistakes occur through vagueness of instructions. Tender prices mean little unless everyone is quoting on exactly the same specifications.
CONTRACTING (cont’d)
Give sufficient time. A contract person needs reasonable time to learn your needs and do a good job. Tender calls should allow sufficient time too – if you want thorough, thoughtful proposals. If you do not give enough time, the best firms may ignore you.
Get a reasonable number of quotes. When you tender – do not invite every company to quote – you will waste a lot of their time and yours. Know the industry and select a reasonable number who you feel have the capacity and the expertise.
Rotate your suppliers – Avoid the lazy habit of always using one service. Try someone else occasionally or at least invite proposals. Keep yourself and your suppliers on their toes.