The following article was prepared by Mike Taylor, C.P.M., for distribution to ISM affiliate newsletters. December 2009


Who Are You?

My guess is that you regularly issue contracts (and I also mean purchase orders) that authorize seller employees to have access to your facilities. In addition to workers,  you might also have delivery persons in the office or personnel checking stock in the tool crib. Whatever the reason, when we reach an agreement with a seller that includes access to Buyer facilities, proprietary data, valuable property and personnel, we expect the seller to send only bona-fide employees. We presume sellers have verified their employeesí identities, confirmed they are legally employable, confirmed they are not abusing illegal substances, have no violent criminal record, will not sexually harass our personnel and are CPSMs [o.k. maybe thatís a little extreme]. But you get my point.

Our tacit assumption that seller's personnel are legitimate and donít pose a risk to our company raises serious questions:

  1. Is this a risk we should be concerned about? Ask your insurance company and Iíll bet you get a loud ďYESĒ
  2. Do our contracts require sellers to validate the people they send to our office? Language like this?
    • Seller shall ensure that all seller personnel performing work on buyers premises or in buyer controlled facilities will perform the assigned tasks safely and professionally, are abusing illegal substances and are legal full-time employees of the seller.
  3. Do we have a contractual right to refuse entry, reject and require replacement of a sellerís person?
    • Buyer reserves the right to refuse entry or eject any of sellerís personnel from buyer controlled premises when in the opinion of Buyer they represent a hazard or concern. If seller is unable to provide an acceptable replacement, seller may be considered in material violation of this agreement.
  4. Do you ever check to be sure sellers are checking the background of their personnel?

It seems like legitimate businesses would go a long way towards making sure they only employ personnel who will properly represent their business. With 10% unemployment, itís hard to imagine otherwise. In fact, the U.S. Immigration and Reform Act of 1986(ICRA) Ė yes it was over 20 years ago Ė requires as a minimum that employers verify the eligibility of applicants for employment. Among other things, the ICRA requires employers verify applicant data using an I-9 form. http://www.uscis.gov/i-9

Surprisingly, a recent Department of Energy Inspector General report found that some subcontractors working at the DOE Savannah River site, were not in compliance with the ICRA. Based on this report, Iíd guess non-compliance with ICRA is widespread. Itís worrisome because ICRA compliance is only a small part of employee verification. It doesnít cover additional employment concerns such as criminal background, substance abuse, adequate training, safe work history, authentic credentials, etc.

Read the IG report: http://energy.gov/ig/downloads/inspection-report-ins-o-10-01

Over the last year, Federal agencies and contractors have also started using an automated system to verify candidateís eligibility for employment. The E-Verify system is now becoming mandatory for government contractors and also their lower-tier contractors. Even though the E-Verify system does not address many of our concerns about seller's personnel, it is a start. Using the E-Verify system is free, relatively easy and makes good sense for all companies. After all, compliance with ICRA is already Federal Law, so why not go to the next step and use an automated tool to help ensure compliance. www.uscis.gov/

Even if you donít require the use of E-Verify, at the very least I suggest you review language in your standard contract terms to make sure they require adequate assurance about sellerís personnel. I also highly recommend you discuss the subject with sellers who are providing personnel that might be considered high risk (performing hazardous work, have unescorted access to all buyer facilities, could adversely affect safety, etc.).

While we donít want to get in the middle of an employer/employee relationship, but it is our obligation to protect our company and ask a few questions of our sellers. If you donít like the answer, or sellers canít convince you they have a good employee validation process, then maybe itís time to look for another seller. Try these discussion questions:

  1. Are you subcontracting any portion of this work? Are you only providing your employees in performance of this agreement?
  2.  Iím interested to know what process you go through to verify that your employees who will be performing work in my facility, will do so in a safe manner.
  3. Do you require background or substance abuse checks of potential employees?
  4. Is your hiring process in compliance with ICRA?
  5. Have you considered or are you also using the E-Verify system?

Even if it doesnít change much Ė the simple act of asking questions will raise awareness of the seller [and your staff] about the potential issues. In this case, anything that initiates detailed discussions about contract requirements (explicit or implied) before there is a problem, is a good thing.

Mt


Read more articles in the Purchasing Toolbox at http://www.mltweb.com/prof/tools.htm and in the BuyTrain news article archive at http://www.mltweb.com/tools/buytrain/index.htm


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