How To Prepare For The Fortune 500 Review

Jim Luff
Posted on January 19, 2015

While it can be lucrative to get a contract with a Forbes Fortune 500 company such as Chevron or Schlumberger, rated No. 3 and No. 228 respectively on the 2014 list, landing that contract subjects you to scrutiny and rules that may be a bit too much for you.

Getting In The Door
This is probably the hardest part of landing a contract. Getting to the right person in a large company can be exhausting. Hitting up the receptionist in the corporate office isn’t going to do it. Chances are, she doesn’t have a clue where to direct you. These decisions are likely made at corporate headquarters. In the case of Chevron and Schlumberger, that would be in Texas.

However, local work can be influenced locally but chances are the person you are talking to on a local level has no idea of the contracting process and can only introduce you to someone “upstream.” In huge corporations, that is the jargon: upstream and downstream. Just like a fish, swimming upstream is difficult. Your best bet is to find out who uses transportation services locally and consider these questions: What are the needs? Can you meet the needs? Do you have the right mix of equipment? Usually the local level department is called “supply chain management,” or they may have a “supplier relations” department.

These departments have discretion over companies used for local, short-term orders. That’s not the same as having a contract that provides you with exclusivity. Having a contract gets you in the coveted company supplier directory. Think of it as Yellow Pages for company employees looking to engage a particular type of service. A listing in the directory means you accept their purchase orders and are an “approved vendor,” meaning no red tape in engaging your services.

Getting To The Decision Maker
Once you engage a supply manager or contract supervisor in supply chain management, you can ask to participate in the next bid for personnel transportation. If your request is accepted, you will be directed to someone upstream to help you complete the bid. This is known as responding to a Request for Proposal, or RFP. Paulo Rhor, a logistics resource locater for Schlumberger — a supplier of technology, project management and information solutions to customers working in the oil and gas industry worldwide — works from his base in Sugarland, Texas. Rohr travels to a prospective bidder’s location, and together with local managers of Schlumberger, performs an onsite audit. “It is my job to make sure that every vendor we contract has the qualifications and capability to serve our needs.”

John Towner, a Bakersfield based supply manager for Schlumberger, adds, “I cannot stress safety enough when performing service for Schlumberger.” Towner inspects the contents of first-aid kits in vehicles, fire extinguisher service tags, insurance ID cards, vehicle registrations, and all the other DOT mandated items such as headlights, brake lights, turn signals and other vehicle functions. If you don’t pass muster with Rohr and Towner, you are not going to get a contract.

First Company Once-Over
You must be transparent during the initial review. That means opening your financial books and providing a copy of your last profit & loss statement, and describe your company in terms of management structure, ownership structure, other business investments, number of employees, total revenue for the past two years, and other sensitive data. You will be asked to prove how long you have been in business. Schlumberger requires you to provide a list of all corporate accounts you serve and specifically what companies in the petroleum industry and your annual volume of business with them. If you don’t want to share this, walk away. This is the beginning of what will likely be more than 100 emails between you and the procurement officer, Rohr says.  

Your People
You will need to state what qualification requirements you have for hiring and disclose the nature of your engagement such as employees, contractors or casual drivers. If you use contractors, be prepared to share copies of those contracts. You will need to document how you train new employees, who trains them and what qualifications they have for training. You will need to produce written training records, and you will agree to provide those training records upon request. Steve Williams, a safety officer for Chevron, says it is his job to periodically do onsite visits and review personnel files of all drivers who have served Chevron in a past time period to ascertain proper licenses, medical cards, DMV records and any disciplinary actions relative to driving.

Authority to Operate
You must submit copies of any licenses or letters of authority such as Public Utilities Commission, USDOT Authority, FMSCA registration, as well as local business licenses or required operating permits. They will know what you are required to have when they ask. During your onsite audit, you will be asked to produce actual licenses or letters of authority.  

Operational Expectations
Chevron and Schlumberger have stringent requirements in how you deliver service and how you record and document the way you do business. Be prepared to share how you calculate mileage, and whether you use a GPS system and/or other monitoring systems such as onboard camera recorders. You will need to demonstrate how you use these during your onsite inspection. You will need to provide a written plan for retiring and acquiring new vehicles. A written accident plan must be provided. You also must present a plan for internal investigations, including the qualifications of people performing post-accident investigations. You will need to have plans for timely post-accident drug testing, and the chain of custody for specimen samples for the final report.

Required Training
Both companies require driver safety training courses to be mandatory. Chevron accepts Smith System training while Schlumberger requires at least one person participate in a “Train The Trainer” program conducted in Kellyville, Okla. The cost of transportation, lodging and tuition are all paid by you. Chevron does not reimburse or compensate for safety training. Both companies place great value in safety, and driver training is mandatory for all employees at both companies. Williams says no Chevron employee may operate any company vehicle until they have successfully completed the Smith System course.

Diane Duran, contract supervisor for Chevron, says insurance requirements vary among contractors, but in some cases Chevron may require additional endorsements or higher liability limits than state regulatory agencies. This might include a waiver of subrogation and endorsements naming Chevron as additionally insured on your policy.
Both can rack up additional premiums for you, and they are your responsibility to obtain and keep proof on file at all times. Chevron pays a third party to make sure all contractors comply with insurance at all times. The third party sends letters 30 days in advance of a policy ending period to remind service providers that if their insurance lapses, the contract will be cancelled, says Jessica Stumbaugh of Chevron.

RFP Submission Requirements
You must provide the following information and documents with your RFP package:

Your Company

  • Copies of all operating licenses and authority letters
  • Business license
  • Most recent P&L statement
  • Stated revenue for the past two years (tax return)
  • Description of ownership structure
  • Description of management structure
  • Description of vehicle replacement plan
  • Disclosure of any other business investments
  • Number of employees
  • List of all corporate accounts
  • Proof of insurance

How You Operate

  • Examples of invoice documentation
  • Explanation of how you calculate mileage
  • Type of GPS system you use and how it works
  • In-vehicle cameras and how they work
  • A copy of your written accident plan and post-accident management
  • A copy of your written drug-and-alcohol testing program
  • A copy of your accident investigation policy

Your People

  • A written plan for hiring qualified drivers
  • Documentation of your trainer’s training
  • Submission of a qualified accident investigator in
  • your company
  • Proof of training for accident investigator
  • Proof of any safety training such as Smith Systems for
  • each driver

Related Topics: building your clientele, client markets, corporate business, Corporate RFPs, customer contracts, How To, negotiations

Jim Luff General Manager
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