> Having reached the end of a tender for off-site storage in which they
> failed, our incumbent supplier has proposed an exceptional charge per
> box
> that is equivalent to a Permanent Removal Fee. This is not included in
> our
> contract and was not included or agreed when an amendment to the
> contract
> was made at the time the incumbent acquired our previous supplier.
So, the key items I picked up on here are:
1) end of a tender for off-site storage in which they failed
2) has proposed an exceptional charge
3) This is not included in our contract
4) was not included or agreed when an amendment to the contract was made
#1, if they failed to provide adequate service and you are at the end
of your contract term, then you are under no obligation to negotiate
with them
#2, simply because they proposed it doesn't mean you have to agree to
accept it
#3, there is no obligation to pay it because it wasn't expressed in the
contract
#4, if they didn't propose it then, and you never agreed to it, then
you shouldn't have to pay it
> The proposed fee of £1.35 is in addition to the normal pulling/handling
> charge of £0.43 making a total of £1.78 per box to terminate the
> contract.
Well, if what you said is accurate, you don't have an in-force contract
anymore, correct? So you would request your boxes to be pulled and
either you arrange to pick them up or have them delivered and after
they're removed, you inform them the contract has ended and you no
longer require their services. If the issue is the volume of the boxes
being requested, agree to take them in multiple or split shipments.
> The fee has been described by the incumbent as covering the extra work
> involved in pulling from storage a greater number of boxes per day than
> would normally be expected in the day to day management our contract
> up to
> now.
So, if you had a massive lawsuit and required all of your boxes (or a
large volume of boxes) pulled and you were a client in good standing
they'd say "Sorry... you're taxing our workforce so we'll have ti
charge you more than your contract rate... now, be a good chap and suck
it up" ?? I don't think so...
> What we need to know is:
> - is this now common practice across all suppliers?
It's a common practice if it's spelled out in the contract to charge
such exorbitant fees if you agree to them.
Typically, they include the removal of all records from the database
(which a client could care less about), palletizing (which makes
delivery easier for them), verification of the boxes against the
inventory (which they're obligated to do anyway... it's an accounting
step) and "additional labor at a quoted rate" (if it's in the contract,
but you say it isn't).
> - how strong is the case against such a fee i.e. how successful have
> list
> subscribers to been in challenging these fees?
I've seen them successfully negotiated out of proposed new contracts,
negotiated down, negotiated to disappear over a period of time or
simply laughed at and you go elsewhere for a quote.
On an in-force agreement where it was never quoted, I wouldn't think
you would have any problem telling them to pound salt. You may want to
get your firm's legal counsel to give them a call.
If you're negotiating with a new service provider and you (for some
unknown reason) are unable to avoid paying this fee, in many cases your
new provider will pick up the cost to get your business, and might bill
it back to you over a period of time or simply absorb it if you give
them a long enough contract term.
> - What level of fee can be considered reasonable for the actual extra
> costs
> incurred during the bulk uplift from an incumbent supplier.
If it's a MASSIVE volume of boxes, it's reasonable to assume that it
would take them some time to pull and assemble the boxes, they may
legitimately need to palletize them and they will need to have an area
large enough to "stage" the records for pickup... and they may need to
secure additional staff to meet the requirement. What would be
reasonable is up to you if there's no agreement to pay anything, but
I'd say that 300% is NOT reasonable. What would be reasonable is what
it actually costs them to do it, like agreeing to pay a direct labor
rate times a number of hours to accomplish the work, less the fee you
have in your contract of £0.43 for standard handling.
Larry Medina
Danville, CA USA
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