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Low Bidder -- Big Problem

The Chicago Bureau of Procurement Services declared as "qualified" and selected the lowest bidder of 16 contract guard companies that bid on services at O'Hare and Midway Airports. The successful bidder, Universal Security, had no airport security experience and no prior city contracts that would enable a judgment to be made on its qualifications. The contract required Universal to pay its workers $10.50 per hour but it paid them $7.50, with no time-and-a-half for overtime, and reneged on promises to establish a retirement program and a program to award promotions to superior employees. Worker dissatisfaction resulted in poor job performance, high turnover, and complaints to the Chicago City Council. At an angry public hearing, several aldermen urged that Universal be booted out and the contract re-bid. (Source: Security Letter, New York, NY, August 1, 2007.)

Facts and Advice on the Alarm Business

Geoff Kohl, editor, SecurityInfoWatch.com, reported facts presented at the National Burglar and Fire Alarm Association meeting that took place in Indianapolis in June of this year. Kohl said he learned that:

1. On average, it costs $30 to replace one lost dollar of recurring monthly revenue (RMR).

2. Quality is remembered long after price is forgotten.

3. Link up with realtors. For example, Ringgold Telephone Company (which also offers security services) ties in with a realtor that sells directly to new homeowners.

4. Direct mail marketing is having a hard time, with a response rate under 1 percent. 5. A cold call isn't always the time to try to "close" new business, but that it is often more effective to just set the stage for a longer conversation with a potential customer.

Akal Security Agrees to Pay

Akal Security has agreed to pay $18 million to the U.S. government to settle claims that it violated terms of a contract. According to the allegations, Akal contracted with the U.S. Army to provide qualified personnel who were weapons-trained in accordance with military requirements. Some of the guards, however, failed the necessary qualifications. The suit, titled as a whistleblower action, also alleged that Akal failed to satisfy hour requirements in the contract. The individuals who brought the claim will share the government's settlement award. (Source: Security Law Newsletter, August 2007, Strafford Publications, Atlanta, GA.)

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