While most of our clients engage us to complete construction audits for one of their projects, we also help them with process improvements and assist them with contract creation and negotiations, and recently, we completed a review of annual service agreements for one our clients.
We were asked to review our client’s mechanical and electrical service provider agreements. Their contractors perform miscellaneous maintenance and complete small to medium-scale projects at our Client’s corporate campus. The annual agreements are structured similarly to a construction contract wherein they have agreed upon labor rates, escalations, fees, and a defined Cost of Work.
The results of our review were significant for our client: Taking into account the service agreements, labor rates, invoices, and other information reviewed, we made a sizable reduction in the straight time labor rates of $2 to $5 per hour, and most notably, we reduced overtime and double time rates by an average of $10 to $17 an hour. In addition to this, we discovered that the providers were adding project fees to their labor rates even though the labor rates already contained overhead and profit.
Following the review, our client created new service contracts that significantly helped them save money, reduce their risk, and clearly define the costs they were being charged. In addition to review of their service agreement, we also created a billing template for monthly invoices that made the processing of invoices more efficient and effective.
Have you had your services agreements reviewed lately? Please contact me if you would like more information or to find out if your company could benefit from having its services agreements reviewed. We are happy to help.
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