Vendor Qualification Checklist: How to Vet Any Facility Service Provider

Hiring the wrong facility service contractor creates problems that extend far beyond poor cleaning or missed maintenance visits. An uninsured contractor who injures an employee on your property creates direct liability for your organization. A contractor who misclassifies employees can expose you to wage and hour liability. A financially unstable vendor can abandon a contract mid-term, leaving you scrambling during critical operations.

A structured vendor qualification process protects your organization from these risks and consistently identifies higher-quality service providers. Use this checklist before executing any facility services contract.

Step 1: Licensing and Legal Status

• ☐ Business entity verification: Confirm the company is a registered business entity (LLC, Corp, etc.) in your state — verify through your state's Secretary of State business search
• ☐ Contractor's license: Verify current, active state contractor's license for relevant trade (HVAC, electrical, plumbing, general contractor) — search state licensing board directly, not the contractor's certificate
• ☐ Trade-specific certifications: EPA Section 608 for HVAC, pesticide applicator license for pest control, fire alarm contractor license, elevator contractor license as applicable
• ☐ No outstanding license violations: Search licensing board for any disciplinary actions, suspensions, or complaints against the license
• ☐ Business name consistency: Confirm the name on the license matches the name on the contract and invoice — name discrepancies can indicate unlicensed operations

Step 2: Insurance Verification

Never accept verbal confirmation of insurance — always require a certificate of insurance (COI) from the contractor's insurance agent, not from the contractor.

• ☐ Commercial General Liability: Minimum $1,000,000 per occurrence / $2,000,000 aggregate for most facility services
• ☐ Workers' Compensation: Required in all states — no exceptions. Verify limits meet your state's requirements
• ☐ Commercial Auto: Required if contractor uses vehicles on your property — minimum $1,000,000 combined single limit
• ☐ Umbrella/Excess Liability: $2M–$5M umbrella recommended for higher-risk services (roofing, electrical, HVAC)
• ☐ Professional Liability (E&O): Required for engineering, design, or consulting services
• ☐ Your organization named as additional insured: Require this endorsement on the GL policy — it provides direct coverage protection if a claim arises from contractor operations
• ☐ Certificate expiration dates: All policies must cover the full contract term — calendar renewal dates and require updated certificates before expiration
• ☐ Verify directly with insurer if high-value contract: For contracts over $50,000, consider calling the insurance carrier directly to verify coverage is active

Step 3: Safety Record

• ☐ Experience Modification Rate (EMR): Request the contractor's workers' compensation EMR — 1.0 is the industry average; anything above 1.25 indicates above-average workplace injuries and should raise concern
• ☐ OSHA 300 log review: For contracts over $100,000, request the last 3 years of OSHA 300 logs — review for frequency and severity of workplace incidents
• ☐ Safety program documentation: Request a copy of their written safety program — a contractor without a written safety program has no safety program
• ☐ OSHA citation history: Search OSHA's inspection and citation database (osha.gov) for the company's history
• ☐ Subcontractor safety requirements: If the vendor subcontracts work, do they impose the same safety and insurance requirements on subcontractors?

Step 4: Financial Stability

• ☐ Years in business: Fewer than 3 years in business carries elevated risk for contract abandonment — proceed with caution and consider performance bonds for large contracts
• ☐ Business credit check: For high-value contracts, run a Dun & Bradstreet or business credit check — look for judgments, liens, or collections
• ☐ Bank/financial reference: For large contracts, request a bank reference letter confirming the company maintains adequate operating accounts
• ☐ Performance bond availability: For contracts over $50,000 or mission-critical services, require or at least verify the contractor's ability to obtain a performance bond
• ☐ No tax liens: Search your state's tax lien records for outstanding tax liabilities — contractors with tax liens often have cash flow problems that affect service delivery

Step 5: Reference Verification

References are only useful if you actually call them. Plan 10–15 minutes per reference.

• ☐ Require a minimum of 3 references from similar facilities (comparable type, size, and service scope)
• ☐ Verify reference is a real, active account — not a friend or relative
• ☐ Questions to ask each reference:
  • How long have you used this contractor?
  • What services do they provide for you?
  • How do they handle quality issues or complaints?
  • Have they ever missed services or failed to staff adequately?
  • How is their communication and responsiveness?
  • Would you renew their contract? Why or why not?
• ☐ For a shortlisted finalist, consider requesting a site visit to one of their current client locations to see performance in person

Step 6: Operational Capacity

• ☐ Employee count and structure: Do they have adequate staff to service your account without stretching existing commitments?
• ☐ Self-perform vs. subcontract: What work do they perform directly vs. subcontract? Excessive subcontracting reduces accountability
• ☐ Geographic base: Is their nearest operational base within a reasonable distance for emergency response?
• ☐ Equipment owned: Do they own the equipment required for your scope, or will they need to rent for each service?
• ☐ Emergency response capability: Can they respond to emergencies outside normal business hours? What is the guaranteed response time?
• ☐ Technology and reporting: Do they have a work order system or service reporting platform? How will they document and communicate service completion?

Vendor Qualification Score Card

Category	Pass / Fail / Notes
License verified and active
GL insurance meets minimum
Workers' compensation verified
Additional insured endorsement
EMR at or below 1.0
3 references called and positive
No OSHA or license violations
Financially stable (3+ years)
Emergency response capability confirmed

Rule: Any "Fail" on licensing, workers' compensation insurance, or GL insurance is a disqualifying condition. Do not proceed with a contractor who cannot demonstrate these three minimums.