Quick answer is, "It depends". As others have already noted, a contract is generally negotiable. That said, there are companies out there who generally refuse to negotiate their terms and conditions. Hostage fees are one of the areas that some companies refuse to negotiate. As Julie notes, you should expect to pay for reasonable services performed by the vendor  in the process of returning your records. However, it is important that those costs are clearly defined by the contract or related agreements. The process should also be defined in some fashion. Many of us have horror stories of dealing with vendors who behaved in a less than professional manner and fell back upon a contract which was not explicit in expectations.

When I refer to "hostage fees", I am speaking of the non-service-related charges applied to termination of an account and withdrawal of the records from the vendor. These fees are described in many terms including, but certainly not limited to: "permanent removal", "permanent withdrawal", "termination fee", "delocation fee", etc. These are general charges over and above normal withdrawal activity fees for retrieval, palletizing, and transportation. They are sometimes justified by the vendor as a means of compensating the vendor for additional labor, supervisory expenses, and the undepreciated cost of shelving acquired for the customer. (I've heard them all.) These fees are generally reasonable if pro-rated as noted by Edward over the term of the contract as a means to ensure that the customer holds up their end of the contract during the negotiated term of the contract. In my mind, once that term has been completed, the customer is free to change
 vendors, with an expectation that reasonable and normal costs for services rendered will be paid.

I have heard vendors claim that the hostage fees are not a big deal because" 1) "The customer is going to get reimbursed for them by the new vendor." 2) "We reimbursed the customer for prior hostage fees when they moved in." 3) "We built shelving for the customer and now it is empty." I'm sure that most of us would scoff at those remarks.

Another area of contention today is minimum storage and service levels. I suspect that these terms will become the next major area of contention. Many contracts are being written that contain a clause that requires the customer to guarantee a certain storage volume or activity volume over the life of the contract. I understand where this comes from, but in some instances, the language survives substantive changes to the customer's business and the customer is then forced to pay storage charges for boxes no longer in storage. I understand the concept of volume discounts, but I don't understand paying for storage or services that aren't being provided.

The bottom line is that records managers have to educate themselves and their procurement and legal departments on the implications of these sorts of clauses in contracts. Don't just let procurement negotiate price. Procurement people become fixated on that cost per cubic foot and don't understand the total costs of the deal in many instances.

 
Patrick Cunningham, CRM, FAI
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