More and more corporate procurement organizations have adopted a methodology of engaging in bidding wars through online auctions to drive competing companies to produce the lowest cost of ownership or purchased services for the company.   

What is extremely disconcerting is that an increasing number of procurement organizations in companies apply this online bidding war methodology to human services, particularly in the area of temporary help, cleaning and security officer services. Most will agree that it is one thing to purchase tangible materials and even some intangible products like insurance utilizing this procurement process, but it is an entirely different moral standard that is being violated when people are being treated like a commodity! Ask yourself, ask the head of Human Resources, ask the head of procurement and better yet, ask your CEO…does this type of procurement methodology conform to your company’s code of business conduct? Does this type of procurement methodology treat people with dignity and respect?  

We are told that the quality of services that are ultimately provided under the contracts that result from this type of procurement methodology is generally rated as less than satisfactory.  We have also been told that once procurement has handed off the process to the functional organization responsible for managing contract performance, an inordinate amount of time has to be spent ensuring that the service providers do the job. After all, the procurement folks met their performance goals by saving X amount of dollars for the company and get their bonuses.

As a result of this bidding war phenomenon, service industry organizations have been forced to operate on razor thin margins. People who are hired to perform the actual tasks defined in the contract are frequently treated poorly, forced to work excessive overtime, charged for equipment, uniforms, training and a host of other things. As a result, strong security officer unions have been formed in some cities, which are likely to spread to others.

Another thing to consider is that cleaning crews and security officers generally have unfettered after-hours access in most companies and are doing their work when virtually no one from the company is around to oversee them. Unless your company performs background investigations on any and all contractors working on your sites, you have no idea who these people are or what they have previously done. 

A number of cleaning services have been fined for hiring undocumented workers to perform services at their client’s facilities. When ICE conducts a raid looking for undocumented workers, the headline in the paper doesn’t read “XYZ Cleaning Company Raided,” but instead: “Raid at Corporate Giant Nets Illegal Aliens.” Which headline would draw your attention?

At the end of the day, everyone certainly has a responsibility to control costs, but it is important to maintain dignity and respect. The real goal should be purchasing the highest quality service available and doing so at a fair price. After all, your guard force is truly the frontline of defense in protecting your property and making sure that the facility and everything in it is still there the next morning. 

Set an example by telling your procurement organization that you will not allow guard services to be handled as an online action or bidding war. We feel so strongly about this issue that we will make available for free a model security officer bidding process that has been utilized for more than 30 years, constantly refined and updated. It provides a model RFP, bid response package and contract. The process has been proven when contracting for 168 hours to 35,000 hours a week of security officer services. E-mail your request to Lynn Mattice at: matticeandassociates@gmail.com. 

About the Authors: Jerry J. Brennan is the founder and Chief Operating Officer of Security Management Resources (SMR Group), the world’s leading executive search firm exclusively focused in corporate security. Lynn Mattice is Managing Director of Mattice and Associates, a management consultancy focused at the development and alignment of Enterprise Risk Management and Business Intelligence Programs, as well as Intellectual Property Protection and Cybersecurity.