CONTRACT SERVICES

MEANING
 A contract is defined as an agreement between
two parties , negotiating in a business deal.
 Outsourcing is a ‘conscious business decision to
move internal work to an external provider’
 Most important aspect in a contract is contract specification ,
company document giving clear and precise description about
the task like- frequency schedule aspected performance level
and other relevant details of services provided by the service
provider.
 The contract specification was to prepare with the help of
both parties and consideration from both is to be noted down
and then a final agreement is finalized
REASONS FOR CONTRACT
SERVICES
 REASONS FOR USING CONTRACT SERVICES

1. Lack of skilled labour /man power within the hotel.

2. Avoidance of extra investment be such type of services.
3. To raise the standard of the organization by taking the help
of specialized person.
4. To reduce the current operating expenses
5. To standardize day to day functioning and make it more
precise
TYPES / AREA OF CONTRACT
SERVICES
AREAS OR TYPE OF CONTRACT SERVICES IN
HOUSEKEEPING DEPARTMENT

 Pest control
 Laundry

 Horticulture

 Specialized cleaning

 Interior decoration

 Flower arrangement

 Linen rental

 Security services

 Garbage disposal

 Guest amenities
PROCEDURE OF CONTRACTUAL AGREEMENT

(SELECTION OF SUPPLIER)
Receiving of requisition

Invitation for open application [advertising]

Receiving quotation

Comparison of these quotations

Scrutiny of these application

Selected the best available

 Checklist of market credibility

Visit to the site

Select a contractor/ supplier

Prepare contract specification

Complete contract documentation

Signing of the contract

Receiving services

Continuous performance evaluation

GUIDELINES FOR HIERARCHY CONTRACT
SERVICES
 Consider not to pay in advance.
 Equipment and supplies belonging to the hotel should be
separate from the contractor equipments.
 Regular and cont. evaluation of task perform.

 Properly maintain the in and out register of contracted staff.

 Time period of the services should be clearly mentioned and

strictly followed by both the parties.
 Make sure that you are properly ensured.

 Try to maintain a healthy relationship with the outsourced

contractors
GUIDELINES
ADVANTAGES
1. No capital outlay for equipment.
2. No equipment lying idler [ particularly specialized gadgets]
3. Eliminate the necessity of buying or hiring specialized
equipment.
4. No expense on training , organizing and supervising staff
5. Skilled labors.
6. Extra work may be carried out at certain times.
7. Accurate budgeting for a fixed period
8. Uniformed workers and take responsible for their wages
and benefits.
9. Eliminate problems between management and worker
unions.
10. Knowledgeable experts can provide advice and help in
reducing costs and legal risks.
DISADVANTAGES

1. Weaken authority of the management over the quality and

loyalty of the staff.
2. Loss of flexibility
3. Poor supervision
4. Time frame may not be show up by workers
5. Problems regarding security
6. Lack of cooperation between departments
7. Not meet the standard off hotel.
CONTRACT SPECIFICATION

It is the clearly defined and detailed specification of the work

the work to be done & how it is to done by the contractor /
supplier and receiver.
 A contract has to be framed according to these specification
:-
1. The period or duration of the contract (mentioning the day
of contract , provision for continuation & review of
specification as well as agreement .
2. Schedule of area to be served & frequency of job to be done.
3. Description of the method , equipment , material , staff as
well as the hotel quality expectation including penalty &
cancellation clause.
4. List of security requirement & an arrangement for the same

5. Provision for adequate supervision listing the hotel

requirement specially.

6. Facility for storage , lockers & also some times

accommodation for the contract staff.

7. Time operations (covering operation hours as well)

8.Verification of the insurance coverage of workers , guest ,

hotel , employee .
9. Specified frequency of inspection agreed a firm with the
service provider.
10.Payment & termination procedure & their terms &
condition (both parties will sign in the contract)

Date …….. supplier ……….

Name of the company….. company………
Signing authority………. Signing authority……..
PRICING / METHOD OF CONTRACT

1. Fixed price: - In this work is done for a set price ,based on

negotiation
 Advantage: Advance knowledge of the cost.

 Disadvantage : Lack of control over the quality of the

personnel.
2. Cost plus fixed fee : contractor is paid for the work which
he had performed (+) a fixed amount for this services .
 Disadvantage :Total cost of the product cannot be
determined in advance.
3. Cost plus percentage :- in this type of contract the
contractor is paid for the cost incurred for the project & also a
fixed percentage of total cost incurred.
 Disadvantage: Total cost of the project will not be known in
advance.
4. Guaranteed maximum :- a full amount is paid to the
contractor , the contract mentioning the entire no. of
company required to complete the contract & no further
derivation can be made once the agreement is finalized.
 Disadvantage: Not flexible.
5. Time & material :- contractor is given the cost of material
and labour required for the job.
 Disadvantage:

 1Total cost cannot be determined.

 2 Very little control over the quality of personnel.
Advantages :-
 Flexibility of project