ESTABLISHING VENDOR CONTRACTS

• A contract is an essential element in any business relationship. Your contracts must be legally and financially sound.

After you have selected your vendor, you will need to complete some paperwork before the vendor becomes part of the project team.

Here's an overview of the process:

1. Negotiate the contract terms and conditions with the vendor.
2. Prepare the contract and get it signed by legal office and the vendor.
3. Establish Purchase Order and invoicing processes.
4. Set up an e-mail account for the vendor, if appropriate.
5. Obtain IDs for all vendor employees.

Let's examine each of these in greater detail.

1. Negotiate the contract terms and conditions with the vendor.

Negotiating the vendor contract involves two substeps:

• Prepare for the negotiation.

  A contract is a written document that spells out what you and your vendor have agreed upon regarding the services of the vendor and your responsibilities. Typical subsections of a contract are:

  • Bidding
  • Costs and Equipment
  • Confidentiality Agreement
  • Access to Premises
  • Invoices
  • Communications
  • Reporting
  • Review and Acceptance of Work
  • Timeliness
  • Insurance Verification
  • Attendance at Meetings
  • Back-Up

  Review these guidelines, then review the vendor proposal to see if there will be major discrepancies. If so, prepare to present your company's position to the vendor.

• Conduct the negotiation.

  Meet with the vendor, review the issues, and obtain agreement.

2. Prepare the contract and get it signed by legal and the vendor.

• Obtain a sample contract from your Finance office.
• Review the sample contract and substitute the particular terms and conditions that fit your project as negotiated with the vendor.
• Present the completed contract to the vendor for approval.
• Have the contract word-processed and proofed and then send it to your Legal department for approval.

3. Establish Purchase Order and invoicing processes.

For details, see the Finance Dept. of your company.

4. Set up an e-mail account for the vendor, if appropriate.

Contemporary ID projects demand rapid exchange of electronic documents. E-mail is essential.

5. Obtain IDs for all vendor employees.

If your company maintains security procedures, IDs will be required for the vendor employees.