Choosing the Right Commercial Record CenterThe article below originally appeared in the January 1997 issue of the "Records Management Quarterly" published by the Association of Records Managers and Administrators (ARMA). Several months ago, there was an exchange of information on the Internet regarding client satisfaction with commercial record centers. As with most businesses and services, the level of customer satisfaction among commercial record center users covered a wide spectrum. Most of the contributors to the Internet dialog who had negative comments about commercial record centers were concerned about costs. Some of the costs were not anticipated while other costs were not clearly explained or defined. If your organization is considering outsourcing to a commercial record center, it is essential that you be completely familiar with and understand all aspects of the contract. This article discusses some of the issues which you should be aware of before committing your company to an offsite record storage agreement. "Selecting An Off-site Commercial Record Center"By Michael J. Faber, CRM Over the last 15 years, American businesses have witnessed an explosive growth in the volume of documentation and information which they are required to retain. Although predictions have been bantered about for more than a decade, the "paperless office" continues to represent nothing more than an elusive goal for most companies. On the contrary, many companies and organizations are experiencing a significant increase in the volume of their inactive records. Extensive litigation, government regulations and longer retention periods have all contributed to the growing volume of inactive files and records. As the volume of in-house records continues to increase, storage costs begin to become an issue. One solution is the conversion of paper documents to optical disk, microfilm and other formats. Although document conversion can dramatically reduce the overall volume, it is a very expensive option and is normally considered for only a small percentage of records. In most situations, it would be difficult to justify the cost of converting all, or even a large portion of inactive records. Another alternative is to lease or purchase warehouse space at an offsite location. While proprietary warehouse space is much more cost effective than storing in expensive office space, this option may present its own set of difficulties. Costs for employees, vehicles, computers, software and shelving are some of the additional factors which need to be carefully considered. Since the early to mid-1980s, the concept of outsourcing, or subcontracting selected services, has become a highly accepted management tool. Many companies have elected to use commercial record centers for a long term solution to the problem of where to store and manage their inactive records and information. The phrase "caveat emptor," or buyer beware, usually refers to the retail marketplace, but can also apply when making purchasing decisions for products or services in the corporate environment. As a manager in the records and information arena, contracts for equipment or services for your department should be scrutinized very carefully before committing your organization to a long term obligation. If you are writing a Request for Proposal (RFP), or will be part of the decision making process in selecting a commercial record center for your company, the evaluation should focus on five general areas: facility, staff, service, computer system, and cost. FACILITYIs the facility owned, or is it a lease/rental property?A primary consideration is whether the facility is owned by the commercial record center. Future storage costs could be dramatically affected by lease/rental increases if the record center is unable to negotiate a new lease and is forced to transfer holdings to another location. In addition, the lack of accessibility and inconvenience during a move could be unacceptable. LocationThe record center should be in a safe area and within a reasonable distance from the location it will service. Employees of your company may need to visit the record center for audits or research and should feel comfortable when visiting the facility. If rapid response is the main criteria, close proximity should be considered. If disaster recovery considerations are part of the evaluation process, a more distant facility may be more appropriate. Avoid areas which may be in a flood plain or in an area which may have buildings which house hazardous materials. Determine the particular requirements of your company and consider them carefully when evaluating the location preferences. ConstructionProtection of records from fire, water and environmental damage should be paramount when considering construction specifications. Underground facilities offer protection from many natural disasters (hurricane, tornado, roof collapse from snow, etc.). Underground facilities can also offer a controlled temperature and humidity environment without dependence on man made systems. However, an underground facility may not be available within a suitable distance for prompt access and retrievals. Brick and concrete construction is preferable to wood or sheet metal, and the roof should be free of any problems which could allow leaks and damage records. All access points should be secured and monitored 24 hours a day by a third party, offsite security company. Reports should be available indicating time and location of any alarm conditions. In multi-floor facilities, ask for documentation indicating that the building has been engineered to adequately support all load bearing floors. Shelving should be industrial strength and protective rails should be permanently installed in the floors to avoid damage to upright supports by forklifts or other equipment. Areas within the record center should be designated for staging, indexing and destruction of records. The facility or operations manager should be able to provide the appropriate permits and licenses which would indicate that the record center meets all applicable building, safety and fire codes. STAFFExperienceBecause of the long-term nature of offsite record storage contracts, the experience of the staff at the commercial record center will be critical to the ongoing success of the offsite storage program. If it has not already been provided in literature and brochures, ask questions about the background and experience of the staff at the record center. Are they members of and active in professional organizations such as ARMA, the Association of Commercial Record Centers (ACRC)*, the International Facility Management Association (IFMA) or other organized groups which offer educational and networking opportunities? Does the company encourage and support employee efforts to attend classes or pursue industry related programs? Is there a full time Certified Records Manager (CRM) on staff at the record center? Affirmative answers to most of these questions would indicate that the company is making a continued effort to keep abreast of current issues and technologies, and to be in a position to provide quality service to their clients. TrainingBe certain that the company has a training program in place to thoroughly familiarize new employees with the proper methods and procedures to care and handle records. The company should also have a continuing program to reinforce previous instruction and to introduce new ideas and concepts in records management techniques. Ask if the company has a formal Disaster Recovery Program in place, and if it has (or has applied for), ISO 9000 Certification. These types of programs normally require participation and involvement from almost all employees and would suggest that the company has made a major commitment to an ongoing training effort. CouriersCouriers should be full time employees of the commercial record center. The only way to ensure that couriers have been trained properly and know the correct procedures, is if they are a full time employee of the record center. Third party delivery contractors should not be used to handle what can often be proprietary information. Be certain that there are an adequate number of employees and vehicles to respond to client requests. Couriers should be uniformed and wear photo identification badges. It also recommended that all couriers and record center personnel be bonded. SERVICE"Service" is an intangible item and is sometimes difficult to define. As time goes on however, service will probably become the single most important factor in rating the satisfaction level of the commercial record center you select. If the record center you choose has made a serious commitment to providing quality service, it will be reflected over the long term and you will begin to consider the commercial record center an extension of your own company. During the RFP or evaluation process, most commercial record centers will provide a list of current references. Prepare a list of questions in advance and call each one of the references and ask detailed questions about their degree of satisfaction and the overall opinion of the record center. Be just as thorough as your personnel department would be when hiring a new employee. In effect, what you are doing when selecting a commercial record center is hiring their employees to provide quality records management services for your company. Your local ARMA Chapter is also a good source for identifying and evaluating available outsourcing companies in your area. If any members are using commercial record centers, check with them for input as to which companies provide high quality, dependable service. All businesses have to make a profit or they will not continue to operate. Some companies set very high standards for providing an exceptional level of service and refuse to lower those standards. Other companies sometimes lose focus on quality service as they concentrate on growth and profits. Try to align your company with a commercial record center which remains focused on providing high quality service as they attempt to increase their market share. COMPUTER SYSTEMMost commercial record centers now have barcode based computer systems to track and index documents and files. If your firm already has an in-house software program to index and track records, you may want to narrow your search for a commercial record center to one that has a compatible software system. If an automated system is not in place in your organization, commercial record centers which offer compatible, in-house programs may be advisable. In either case, form a management team to determine what the long range records management goals are in terms of computerization and automation. Once these goals are identified, it will be easier to evaluate the computer capabilities of the commercial record centers under consideration. Reporting CapabilitiesCommercial record centers should be able to provide a number of reports which can identify selected groups or series of records. Examples would be: all records out of the center, boxes due for review/destruction, all boxes entering the system before or after a specific date, all boxes accessed more than 3 times during a 12 month period, etc. Many commercial record centers have the ability to perform keyword searches on the entire database to identify specific documents. Determine in advance, the types of reporting capabilities which may be needed, and ask for sample reports. Departmental BillingIf there are a number of departments in your organization, and each one needs to identify record storage costs individually, departmental billing can be extremely helpful. Without this option, manual cost allocation can be extremely time consuming each month. Ask for a sample report reflecting departmental billing. On-line CapabilitiesSome commercial record centers offer on-line access to the client database via modem. Normally, this option will permit the client to view the database information, but not to make changes to the information. If this option is available, be certain that the on-line charges (per hour) are outlined in the rate schedule. IndexingOne of the most important aspects of the software program used at a commercial record center will be the indexing system. Almost all barcode based programs can match a control number to a barcode number. However, if indexing information will also become part of the offsite database, be very clear as to how the information should be formatted. How the indexing is formatted can be critical when information needs to be searched and retrieved. Sample indexing reports should be obtained using actual database information, to be certain that specific data can be identified when needed. COSTCosts for storage and services at a commercial record center will vary dramatically in different parts of the country. However, many aspects of negotiating a record storage contract should be constant, regardless of the geographic area. For instance, if your company has a very large volume of inactive records to store offsite, or if a multi-year storage contract is a consideration, these factors should be used during negotiations to obtain a more favorable price structure in the contract. Many record storage contracts are 2 to 3 pages in length and have an attached Rate Schedule, which becomes part of the contract when it is signed. Once a commercial record center has been selected, it is essential that the contract and rate schedule be reviewed very carefully. ContractThere are two basic types of record storage contracts, 1) Open Ended and 2) Fixed Term. In an open ended contract, there is no predetermined length of the contract. It is advisable in an open ended contract, that a clause be included which requires the client to be notified in writing if there are to be any increases in rates for storage or services. The rate increases should be mutually agreed upon before becoming effective. A fixed term contract is written for a specific period (usually 3 to 5 years) and offers the benefit of locked in rates for the term of the contract. Most commercial record centers should be willing to negotiate the language of the contract if there are clauses which are objectionable. Discuss any of these items with the commercial record center representative and either strike the clause or rewrite it so that it is acceptable to both parties. NOTE: Regardless of the type of contract or how the final language of the contract is agreed upon, have the legal department or corporate counsel review the contract and rate schedule before signing the agreement. Rate ScheduleThe rate schedule normally becomes a part of the actual contract and is the authoritative document concerning billing during the contract period. For this reason, be certain that you are familiar with every line item in the rate schedule. If there are any questions, call your representative and get a complete explanation for any items which are not fully understood. Definition of TermsThe dimensions of a standard records or bankers box are 10" in height, 12" in width and 15" in depth. These dimensions equal 1,800 cubic inches. When compared to a true cubic foot (12"x12"x12"=1,728) the volume of a record box in terms of cubic feet is 1.04. In the records management profession, a records or banker's box is almost universally considered to be 1 cubic foot. In recent years, there has been a trend by some commercial record centers to bill a record box at 1.2 or 1.3 cubic feet per month. Although it may sound insignificant, this billing procedure will increase the monthly storage cost by 20% to 30%! With a large number of boxes stored offsite, this could increase the yearly storage costs significantly. Be sure to clarify this item when negotiating your offsite records management contract. Initial Pick Up of RecordsBecause it is sometimes more convenient and economical for a commercial record center to pick up a large number of records at one time, it may be possible to negotiate a discounted rate for the initial pick up of records. On an ongoing basis, the record center may also offer a discounted rate for the pick up of records in certain volumes (0-50 cubic feet, 50-100 cubic feet, over 100 cubic feet, etc.). This option may also offer an opportunity for both the record center and the client to appreciate an increase in efficiency and a reduction in overall costs. When evaluating costs for pick up and delivery of records, make note of whether the basic cost is predicated on "first box" or a minimum amount. For instance, if 10 boxes are retrieved each day, and there is a "first box" charge, plus an additional cost for each box, this pricing structure can be substantially more than if the cost is based on a total amount of up to 10 boxes for a fixed price. Again, this may sound like an insignificant item, but if there is a high rate of daily retrieval, this factor can result in an additional billing of several thousand dollars per year. Permanent Out Charges and Exit FeesSometimes referred to as "hostage fees," permanent out charges and exit fees are billed when permanently removing records from a commercial record center. These charges are normally billed in addition to the normal charges for pulling or accessing the containers. Although there are legitimate costs associated with permanently removing large volumes of records (palletizing, shrink-wrapping, etc.), these costs should be reasonable. Excessive permanent removal charges represent no value to the customer and are used on occasion to discourage record storage clients from taking advantage of more competitive opportunities. Be very cautious if there are line items in the rate schedule which refer to "negative storage balance" or "permanent removal." The first tenet of the ACRC* Code of Ethics states that "WE WILL - Clearly identify the terms of our storage and service agreements and fulfill them in good faith." The vast majority of commercial record centers honor that commitment, but careful scrutiny of the contract and rate schedule may avoid potential problems.
CONCLUSIONToday's business community is confronted with the dilemma of a constantly growing volume of documents and information which must be retained for longer periods. Conversion of documents to other forms (optical disk, microfilm, microfiche, etc.) may offer a partial solution. Another option is a proprietary, offsite warehouse facility. For many applications, commercial record centers can offer a cost effective, long term solution to the ongoing problem of where to store and manage inactive and semi-active records. Attention to detail is critical when evaluating and awarding an offsite records management contract. *In May 1996 the Association of Commercial Record Centers (ACRC) voted to change the name of the association to Professional Records & Information Services Management, International (PRISM), reflecting the broad range of services now offered by the industry. In addition to records storage services, many commercial record centers offer management consulting services, retention scheduling, disaster recovery planning, optical disk and microfilm conversion, and a number of other products and services.
FOR ADDITIONAL INFORMATIONPRISM, International (formerly ACRC) can provide a quality assurance evaluation checklist which outlines and lists the various services and capabilities which should be included when evaluating commercial record centers. PRISM, International ARMA International has produced a manual which provides detailed information regarding the design, layout and operation of record centers. The title of the publication is Record Center Operations Guidelines. ARMA International The records management "listserve" is a dialog on the Internet which focuses on records management issues. There are approximately 1400 subscribers and offsite record storage is a frequently discussed item. For information regarding the "listserve," contact Ms. Marilyn Harmston, CRM. Her phone number is (801) 378-7089. AUTHOR:Michael J. Faber, CRM is the Vice President of Paxton Record Retention, a commercial record center in Springfield, Virginia. He has been with Paxton since he helped form the company in 1988. He has over sixteen years experience in records management including six years with Tab Products Company. A member of the Association of Records Managers and Administrators since 1986, he is active in both the Northern Virginia (NOVA ) and Washington, D.C. (GWDC ) Chapters. In 1990, he was Chapter Member of the Year for the Northern Virginia Chapter of ARMA. He has served as Program Director and Membership Director for the Northern Virginia Chapter. He is also an active member of the Association of Commercial Record Centers (now called PRISM), the Virginia Association of Archivists and Records Administrators (VAGARA) and the Mid-Atlantic Regional Archives Conference (MARAC). Mike has had articles printed in a number of publications and has been guest speaker at organizations such as the American Society of Association Executives (ASAE) and the Association of Legal Administrators (ALA). Mike is an avid runner and plans to run his 5th consecutive Marine Corps Marathon in Washington, D.C. this October. Reprinted with Permission from ARMA International Records Management Quarterly. Document Service Company Phone: 419-422-3330 Document Service Company is a division of Findlay's Tall Timbers Distribution Center, Inc. |