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Contract Services
- 1. CONTRACT CLEANING Carpet cleaning Floral arrangements Garden management Interior decoration Laundry Pest control etc
- 2. Advantages of ContractAdvantages of Contract ServicesServices • Contractors are specialistsContractors are specialists • Capital outlay is reducedCapital outlay is reduced • Specialised equipment does not lie idleSpecialised equipment does not lie idle • Exact cost of cleaning knownExact cost of cleaning known • Emergency cleaningEmergency cleaning • Risk to direct labour is reducedRisk to direct labour is reduced • Contractor deals with industrial relationsContractor deals with industrial relations
- 3. Disadvantages of Contract ServicesDisadvantages of Contract Services Some contractors may not be specialistsSome contractors may not be specialists Some loss of flexibility to affect changesSome loss of flexibility to affect changes Contract staff may have divided loyaltiesContract staff may have divided loyalties Security problemsSecurity problems Lowest tendered contract price accepted may lead toLowest tendered contract price accepted may lead to deterioration of standardsdeterioration of standards A loss of proprietary interestA loss of proprietary interest Minimal effort may be used to achieve the maximum profitMinimal effort may be used to achieve the maximum profit
- 4. Factors to be considered while allottingFactors to be considered while allotting the contractthe contract ► Reference accountsReference accounts ► Contractor’s experienceContractor’s experience ► Financial referencesFinancial references ► Professional qualificationsProfessional qualifications ► Personnel policiesPersonnel policies ► Methods of quality controlMethods of quality control ► Type of contractType of contract
- 5. Types of ContractTypes of Contract Fixed periodic costFixed periodic cost Fixed periodic cost with controlled inputFixed periodic cost with controlled input Management feeManagement fee Cost plus percentage profitCost plus percentage profit Cost plus fixed feeCost plus fixed fee
- 6. Types of ContractTypes of Contract Fixed periodic costFixed periodic cost Fixed periodic cost with controlled inputFixed periodic cost with controlled input Management feeManagement fee Cost plus percentage profitCost plus percentage profit Cost plus fixed feeCost plus fixed fee
Editor's Notes
- There is a wide range of contract services available to housekeeping and accommodation services department. Contracts may be made with some firms for the provision of certain services. Such companies offer a wide range of services which include: Carpet cleaning Floral arrangements Garden management Interior decoration Laundry Pest control etc The services of contract cleaners will be broadly used in two situations: To carry out general cleaning services where management considers that the use of a specialised company will be more economical, management or staffs do not have sufficient expertise and/or it is preferable not to be responsible for the day to day administration of this aspect of their activities. To carry out specialised or periodic cleaning tasks where specialised skills or equipment are unavailable and it is uneconomical to teach staff these skills or purchase such equipment.
- Advantages of Contract Services Contractors are specialists who can provide trained personnel and use the correct equipment Capital outlay for equipment is reduced Specialised equipment does not lie idle Exact cost of cleaning is known for a given period Emergency cleaning may be undertaken at short notice Risk and hazard to direct labour is reduced The contractor, rather than the management, deals with problems and industrial relations
- Disadvantages of Contract Services As the setting up of a contract cleaning and maintenance firm is not subject to any regulations, some contractors may not be specialists Some elements of control are removed from the management, therefore there may be some loss of flexibility to affect changes Contract staff may have divided loyalties – to the contactor and to the client There may be security problems The lowest tendered contract price is often accepted and this may lead to deterioration of standards There is a loss of proprietary interest since the contract staff do not work for the organisation Minimal effort may be used to achieve the maximum profit It is essential that the contractor must be provided all relevant details of the service required, any constraints and access to survey the area of work. Also, the housekeeper must provide the contractor with a detailed specification of the work required to be done, when it is to be done and how it is to be done so that the contractor can draw up the contract.
- Factors to be considered while allotting the contract When a contract cleaning service is to be used, it is important that the contract is made with the company which will provide the most efficient service to meet the client’s need and not only on cost basis as is often the case. It is important to consider the following factors for each contractor under consideration: Availability of reference accounts The contractor’s experience in the type of service required Financial references Professional qualifications of the contractors Personnel policies Methods of supervision and quality control Type of contract available and method of payment Getting into a contract Prepare a detailed specification indicating exact number of workers, hours, areas, processes used, frequency, time factors and any special projects. Put out tenders to at least three contractors and compare quotes. The lowest quote need not necessarily be chosen because the standard of work may be poor or the contractor may be back asking for more money. Ask to see other contracts being carried out by the contractor – make sure you talk to the client as well as the contractor. Consider the length of the contract and the notice of termination of the contract. Look carefully at the type and method of payment. Read the small print in the contract before you sign it – check with your solicitor if in doubt. Check on type and amount of supervision – make sure you know the names of people to contact e g supervisors and managers Check on security arrangements and identity passes – arranging for meals, lockers, storage space etc. Consider the effect on existing direct labour with regard to possible redundancy and redeployment. In some cases, the contractor may be prepared to offer your own staff employment with the company. Once the contract has been signed, make spot-checks to ensure that specifications are being adhered to.
- Types of Contract Fixed periodic cost: This, frequently used type of contract, undertakes to provide a specified service for a fixed price. It details the frequency and method of providing the service but does not specify manning levels or types of equipment to be used Fixed periodic cost with controlled input: This is similar to the above but it specifies the minimum number of man-hours to be used to provide the service Management fee: The client provides and pays the wages of the operatives, whilst paying the contractor a fee for the provision of the organisation, supervision and management of the contracted service. Cost plus percentage profit: The client pays the cost of the service – which may be both flexible and varied – and also pays the contractor an agreed percentage of the cost of this service, as profit. It is essential, in the case of this type of contract being agreed upon, to ensure that an unscrupulous contractor is not increasing costs purely to achieve a greater profit. Cost plus fixed fee: The contractor receives payment for the cost of the service – which may be flexible – plus a fixed unchanging fee for the provision of the contract service. This type of contract is often the most satisfactory since the service may be varied to meet the changing needs of the client, but there is no incentive for the contractor to increase costs unnecessarily.