More Preferred Vendor and Subcontracting Issues


In my last blog post, I wrote about why your project might pay more for services from your preferred vendor than you would find is the market rate:
http://outonalims.com/2013/07/22/should-you-pay-your-preferred-vendor-more-than-the-market-will-bear/

Despite the fact that this is not only done as an attempt to save some money, it is also often required. In many cases, you don’t have a choice whether or not to pay whatever it is that the preferred vendor gives as a rate. However, you do need to understand the issues around this, because the problems that are created by the situation are usually beyond your control. At the point that you are getting the services, the negotiations between your company and the preferred vendor are probably set in stone and everyone has to live with whatever rules and rates were set, quite commonly.

Before you start looking for LIMS, ELN or other Laboratory Informaticsa services, just be aware of some issues that you might have to deal with.

Problems

  • If you budgeted your project based on the market rates that don’t reflect your preferred vendor’s markup, you will now get fewer services than you had planned. Do not ever go out to the market to ask about rates if you have a set preferred vendor rate. Always discuss rates with your preferred vendor, directly.
  • When the rates are higher, expectations are higher. I guarantee that I don’t get smarter just because your preferred vendor charges more for my services. So, whatever level of service all my other customers have received from GeoMetrick Enterprises will be exactly the same as what you’ll get when your preferred vendor subcontracts to my company, even though you pay more. You might expect more, you might demand more, but you will not get more.
  • If you have the option to get someone from the marketplace instead of using your preferred vendor, try that, first. If your preferred vendor finds someone for you, you cannot then go to that same company and ask to directly use them to get a discount by going around your preferred vendor. So, if your preferred vendor calls my company to ask me if I can provide services to your project, you cannot call me later to try to get around your preferred vendor’s markup. That is considered unethical in the consulting world and I would not be able to help you do that. Once your preferred vendor finds someone for you, the expectation is that you have to then pay your preferred vendor for their effort if you decide the resource is one you would use. You are not allowed to consider how much effort was used in order to determine whether you agree the markup is worth the effort the preferred vendor put in.

Gloria Metrick
GeoMetrick Enterprises
http://www.GeoMetrick.com/


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