The Facilities Contract at the Budget Ceiling
You manage facilities for a 240-person site. The cleaning contract (USD 18,000 per month) expires in 30 days. Vendor A bids USD 16,400 and has strong references, but two safety near-misses were recorded at another site in the past year. Vendor B bids USD 19,100, has an unblemished safety record, and can start in 45 days. Your monthly budget cap is USD 17,500. The incumbent will extend month-to-month at USD 20,000 but has persistent staffing gaps. A customer audit is scheduled in 60 days. The union agreement requires 14 days' notice before any contractor change. Procurement policy requires three bids; you have two. A sole-source justification is permitted but adds 10 days to the timeline.
1. Recommend a course of action for the next 30 days. State the decision criteria you would use and the trade-offs you accept.
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Criteria, in order: safety and audit continuity first, then legal/procurement compliance, then budget, then speed. Price alone cannot settle this because a safety failure or a failed audit would cost far more than the monthly difference.
Recommendation:
- Do not award to Vendor A purely on price. Require a written safety plan, incident history, and insurance review before considering it.
- Negotiate Vendor B toward USD 17,500 by reducing weekend frequency in low-traffic zones, not by cutting required cleaning. If B holds at 19,100, request a documented 1,600/month exception with the safety and audit rationale.
- Bridge the 45-day gap with the incumbent at 20,000 via a one-time exception, and give the union the required 14 days' notice. Use the sole-source justification for the bridge only, not the full contract.
- Keep the audit in view: require a transition checklist and a named site supervisor before B starts.
Trade-offs accepted: higher short-term cost and administrative effort in exchange for lower safety and audit risk. I would document every exception and set a review date.
2. Finance rejects the bridge exception and the union disputes the notice timing. What do you do next?
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I would escalate with a quantified risk statement rather than repeat the request. The package would show: the cost of the bridge (roughly 2,500 above cap for 45 days), the likelihood and impact of an audit finding if staffing gaps continue, and the safety exposure of switching to the lowest bidder without controls. I would present three options with dates: (a) approve the bridge, (b) approve Vendor B immediately with an interim supervisor and overtime, or (c) accept a reduced service scope for 45 days with written customer-facing risk.
On the union dispute, I would not proceed until the notice issue is resolved in writing. I would ask HR and labor relations to confirm whether the 14 days run from the notification date or the effective date, and I would offer to meet the union steward to explain the safety and service rationale. If the dispute cannot be resolved quickly, the fallback is to extend the incumbent on existing terms while the notice period runs. The key judgment is that compliance and safety are not interchangeable with speed; I would rather absorb a short delay than create an untracked labor or safety exposure.