Q: We’re preparing an updated Risk Management plan for 2015. Our committee has really done some great work thus far, seemingly engaged with the task. However, they’ve reached a tricky segment defining and revising the Vendor section. They reached out to me for insight as I’m the Business Manager and can at least provide them with a list of different vendors we have relationships with. But, I’m curious, what should be in a contract when using vendors? What should I be looking for when they propose it for approval?
A: First, let me congratulate your school for taking on the process of putting together a comprehensive Risk Management plan. It’s not an easy task, and certainly one that so many schools we work with consider overwhelming, often deciding to only tackle part of it.
Second, and to answer your question, let’s look at some best practices that should always be included in a Risk Management Plan. Your vendor section should:
- Clarity why your school and each vendor are in business together, and that these contracts do not create employer/employee relationships.
- Note all legal requirements (bonds, licenses, certifications, proof of insurance) for each specific vendor.
- Articulate who’s responsible for what actions when they need to take place (e.g., vendor or Facility Manager for clearing light snow from sidewalks versus heavy accumulation.)
- Note what laws apply and where claims will be litigated. This is especially important if your state and the vendor states differ.
- Consider dispute resolution. How will this work—What does it looks like?
- Have an Indemnification or “hold harmless” clause—meaning if the vendor does something (or fails to do something) that costs your school money, they will be responsible for costs. (Always ask for proof of insurance to be certain they have the wherewithal to reimburse your school.)
- Include termination provisions. If things don’t work out, what actions will be taken to break the contract?
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