Contract Management for Security Providers

Leading the Charge in Protective & Intelligence Services | Strategic Managing Partner at LeMareschal LLC | Visionary Founder & CEO of Athena Worldwide & Nannyguards

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October 7, 2021

One of the biggest challenges that the majority of the security companies will have to deal with is not so much being able to obtain a contract, but to be able to properly maintain that contract once it’s signed and done. We are all quite aware of how many times the intricate contracts for various clients have changed hands over the years. While some might think it is hard to land a good contract, maintaining it professionally and properly while providing what you are being paid for may be very difficult for some companies. According to numerous studies, the average company loses nearly 10% of their clients due to their poor contract management. Why is that? Well, managing contracts (and the corresponding projects) is an overlooked form of corporate leadership and a large part of a company’s operational function and market viability. Project and contract managers must be able to interact frequently with their agents in the field, subcontractors, vendors, stakeholders, family offices and, more often as not, the client himself/herself.

‘’The International Association for Contract & Commercial Management (IACCM) identifies 7 major areas of contract management weakness:

• Disagreement regarding contract scope
• Weaknesses in contract change management/retention
• Performance failures due to over-commitment
• Performance issues related to a disagreement/misunderstanding over what was committed or requested
• Inappropriate contract structures
• Disputes over pricing
• Issues with subcontractors’’

Now let’s discuss some of the most common causes that may cost a security provider one of their contracts:

1. You are charging significantly more than is proper (Faulty Pricing)

At some point, we have to admit that quite a number of companies will overcharge a client merely because of who the client is and not particularly what their security needs or threat level may be. You cannot begin to expect one client/contract to change your own wealth status or single handedly build your company’s gross revenue and/or profit. It is neither ethical nor professional for your corporation to make 2 to 3 times more profit than the agents working the detail on the ground. We all have our levels of operational expenses, but don’t pass that bill on to the client or your protective agents. Make a profit, but make one within logical expectations.

2. You are ‘’suffocating’’ your client

Either: A) You have placed more agents than are needed (Again, this comes back around to profit: The more agents on the ground, the more you can charge), B) Your agents are not exercising proper situational awareness and how to be flexible with protection levels versus the client’s perception of asphyxiation, or C) The company holding the contract has not done a proper Risk/Threat/Vulnerability Assessment and/or are not trained, experienced or knowledgeable enough to ascertain proper staffing and logistics. Some companies will ‘’overreact’’ on the threat level to make their services appear quite necessary to the client, while in reality, achieving the opposite result.

3. Not being able to provide services as promised

A protective detail is comprised of many elements and sometimes you have to be able to provide additional services as you go. You must be the one who can foresee what is or will be needed and provide it before the client even asks for it. We have heard of many companies who fail to render even the basics of what they agreed to provide. We have seen details operating with less manpower than what was requested or changing the personnel so often because they fail to keep the professional agents or cannot staff it properly. Have in mind, clients need stability and familiarity and will become unsettled when they see or must become accustomed to new faces.

4. Failure to accommodate clients needs and solve operational issues (Lack of Customer Insight)

We’ve all heard the phrase, “The client is always right”, correct? Well, from the moment you signed that contract, you alone are the one who must do whatever it takes to construct a smooth protective detail and provide peace of mind to the person who hired you. You alone are the one who must be stressed, work long hours and find a way to solve any issue with the security team or the client’s needs, not the client. It must appear as though all is under control and operational.

5. You are not providing services to a level or standard that is expected and required

We can all agree that our prospective clients will want 3 things: A) To be protected, B) To have the best close protection agents, staff and logistics that their finances can obtain (they fully believe they are paying for the best either way) and C) To have peace of mind. If your corporation is hiring unqualified, unprofessional or unethical agents, or utilizing contractors of the same substandard quality because you refuse to pay for the ‘’good ones’’, the client will soon start looking for another company.

6. Your Project or Contract Manager has no vested interest in the contract (Neglected Contracts)

This occurs so many times when the person who is working for an ‘A’ list company, as a Project or Contract manager, simply doesn’t care to deal with the issues, stay intricately involved or maintain the contract for his company. Most fail to have good communication skills, which is one of the key elements when dealing with clients, vendors, staff, stakeholders or agents in the field. How you communicate during common, day to day interactions with people or personalities will be just as valuable, or more in some cases, as to how you react during a crisis situation and the solutions you are expected to provide. Merely having a project or contract manager on your staff isn’t nearly enough. You must have an individual who can be extremely flexible, can develop a strategy out of thin air and be able to solve complex issues, without raising undue alarm, if they arise.

While these are just a few of the common pitfalls that a contract manager may find themselves encumbered with, each client and contract are unique and every company needs their respective contract managers to be creative, innovative, and highly observational so as to catch any of these issues far before they become problematic and present solutions to overcome them. Our task is not just to sell the client on our services and then walk away, but we are expected to, and should without failure, continue to provide the highest level of service and commitment to our clients that they have come to expect. The sale is the easy part…How we treat and care for the client and their contract once we sign on the dotted line will either build our reputation and lead to more success or it will cause a loss of trust and failure that cannot be easily repaired or regained resulting in the loss of the contract.

Chris Grow

AUS Global Special Services Travel Team

Managing Partner LeMareschal LLC

Denida Zinxhiria Grow

Founder & CEO

Athena Worldwide & Nannyguards

Managing Partner LeMareschal LLC