June 30, 2022

Due to the often abstract manner in which security is applied to an enterprise’s assets, determining standards and associated costs is typically quite challenging for even the most experienced of companies and their procurement departments. Furthermore, the final sense or achievement of security is unlikely to be the result of any one department or service and dependent on numerous supporting elements, some from within the company and some externally, to result in the desired objective. It is therefore puzzling as to why a company that private protection services London does not produce or commercially distribute security products and services would believe they were proficient in determining the financial cost of such services and if they were to apply a margin of error; believe that they were within a mere 10-20% of the provider’s price.

Companies regularly direct their internal departments to determine fair-market-value for their prescribed security demands. Some companies also engage the services of consultants with alleged expertise to assist in this process. Where the plan fails is from the very outset with the majority not even having any first hand experience in running such commercial services, let alone within the terms and conditions set by the company. This excites and frustrates service providers as it presents a headache to educate the company or and opportunity to profit from their hubris or ignorance. Further amplified in developing markets where less scrupulous vendors abound or operate unregulated.

At the pinnacle of this phenomena are those companies that apply a technical and commercial selection criteria. Their first stage presents grossly limiting criteria such as minimum 3 years operating within that sector, prior sector experience, specified office locations, set employee number and so on. This all but removes any possibility of competition within markets outside of the most developed of countries. The second stage then hinges on all the errors accumulated by the company and their advisors to determine what they would charge or see as fair value for such services; with a small margin for error. Quite likely they will also then select the lowest tender.

For companies that want to maximize their budgets, get true value for money or not suffer from ex-post ransom (cheap bids that manipulate the company after the successful contracting to drive the initial price up for fear of re-tendering costs and processes due to potential service failure) or winner’s remorse (you get your service at a bargain price at auction, only to discover that you could have purchased cheaper or better quality items if only you have been better prepared) they should consider the following options

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