Search Form

Considerations for Contracting New Waste & Recycling Services
Commercial recycling and waste management by Roger Guzowski

May 17, 2017

Roger Guzowski

CATEGORIES

Logistics, Operations, Waste and Recycling

Considerations for Contracting New Waste & Recycling Services

Who Owns It?

When you contract for services, an important question is who owns your waste and recycling infrastructure? Do you expect your contractor to provide that infrastructure? Or do you own that infrastructure and provide it to your contractor to use during the term of the contract? It can become an important consideration.

Who and How Long?

One reason the ownership decision becomes important is that it may dictate the nature of your contractor and/or your contract. Asking your service provider to provide all the equipment comes with trade-offs. There is no such thing as free equipment. Someone has to buy that equipment and get an acceptable financial return on their investment.

Smaller contractors typically don’t have a lot of excess container and equipment inventory lying around. As such, if you want to work with a smaller contractor you may be more likely to get locked into a longer contract. They are more likely to have to buy the equipment and may want a longer term contract to amortize the cost of the equipment over several years.

Conversely, a larger hauler may have enough regional or even national inventory to pull from that they can move assets to provide you with containers or equipment more readily. And they might be willing to take a risk on a shorter term contract because if your relationship with them ends, they can readily redistribute the assets they were providing to you to other accounts. However, some larger contractors value uniformity over all else. Having a large inventory only works for them because the pieces are interchangeable from account to account. If you’re not careful, you can get locked into a contract with contractor-specific features that don’t work as well for your particular campus logistics or which make it harder to switch contractors at the end of the contract.

Quality of Equipment

If your contractor provides the equipment, will the considerations that are important to you be honored? As a general rule, if it’s important to you, no matter how petty, put it in the contract. Need all the bins to be a certain color? Need restrictive openings to be of a certain size? Need a certain kind of caster on bins and carts? Want to restrict contractor logos to a certain size? Put it in the contract. If you don’t, don’t be surprised by what you get. I have seen some dumpsters or roll-offs come to a facility with so many holes in it that it looks like the old tin can that had been used in the target-practice scene of a spaghetti western.

Just remember that your specification will also impact the nature of your contractor and length of the contract. The more modifications you require from standard inventory, the more likely you are to increase your cost, restrict your pool of potential contractors, or lock yourself into a longer-term contract.

As such, to get exactly the equipment you want, you may find that it is advantageous to own the inventory yourself and make it available as part of the contract. Owning the equipment may also allow you to work with anyone you want for as long as you want. Just be aware that if you own the equipment, initial cost is not the only concern. There are other considerations like maintenance, replacement cost and liability, to name a few. You have to weigh the trade-offs to determine which option is best for your situation.

Liability to Each Other

Another big consideration when mixing your staff with a contractor's equipment or vice versa is liability. Lost and damaged equipment is a fact of owning equipment. And even with every attempt to maximize safety so is worker injury. But that can get exponentially more complicated when the person using the equipment is not the owner of the equipment. If a contractor damages your equipment, how will they repair or replace it, and vice versa? How do you ensure that the party who owns the equipment properly maintains it so that the party using it minimizes their risk of injury? Talk to your campus risk managers and legal folks early and often to make sure you have sufficient insurance and indemnification language in your contract.

How Do The Pieces Fit?

Regardless of whether your contractor provides equipment or you do, an important consideration is how the pieces fit. For example, if you are asking a contractor to hydraulically collect your semi-automated carts, is the hydraulic cart dumper on their truck compatible with your cart? Test it to be sure. I have found that there were times that even within the same brand of cart that different size carts didn’t work quite right with certain cart dumpers.

Partners Not Adversaries

One thing that I can’t stress enough in long-term service contracts is that you want this person to be your partner, not your adversary. In my opinion, too often, there is an attempt to “win” the initial contract negotiation which can leave one party disgruntled and adversarial from the start. That is not a good way to begin a long-term relationship. As with any relationship, you need to communicate, and to understand the other person’s needs. Communicate expectations, priorities, etc. Understand things that will require trade offs (e.g. yes, your contract may be able to provide a highly customized bin, but if something happens to it, it may take longer to replace because of all the modifications). A little bit of communication and understanding can go a long way toward developing a successful long-term relationship.

Contractual relationships can be a wonderful benefit for your program, or they can be a headache. Determining which often begins with the questions that you ask and the conversations that you have, including conversations regarding who owns the equipment.