Price and manage delivery risks — Security & emergency services

By the end of this lesson, you will be able to calculate a price, test its return and address a delivery risk.

Common to all countries

Build the cost before choosing the price

Start with quantities, paid time, third-party costs and delivery assumptions. Include mobilisation, supervision, compliance, warranty or support, overhead and the end of the contract where relevant. Separate fixed costs from costs that vary with usage. Forecast volumes are not minimum orders unless the contract makes that commitment.

In this exercise, target margin means profit divided by selling price. A 20% margin therefore requires price = cost ÷ 0.80. Adding 20% to cost is a markup and produces a lower margin. Taxes, discounting and financing are excluded from these teaching sums; add the applicable items to a real bid. Test one credible adverse scenario and decide who controls its cause and how the contract allocates it.

Worked example — Provide reception security for three sites

This is a fictional teaching case. Quantities, prices and contractual conditions below are assumptions for the exercise, not legal requirements or market benchmarks.

One unexpected absence creates an uncovered post. A reserve name without availability and required authorisation is not a working contingency. Cost a qualified relief arrangement and test its mobilisation time.

Item	Cost (currency units)
Staffed hours and relief	56,000
Supervision and training	8,000
Equipment and administration	6,000
Total	70,000

Total cost is 70,000. To retain 20% of the selling price as profit, price is 70,000 ÷ 0.80 = 87,500. If “Additional authorised relief capacity” adds 7,000 to cost without a price increase, profit becomes 10,500, or 12% of price. Preserving 20% would require 96,250, only where the procurement permits that price. A cost increase does not automatically entitle the supplier to a contract price increase.

Country specific — what to verify

Verify company and individual licensing, vetting, permitted duties, labour rules, privacy and incident-reporting requirements. ICoCA provides a human-rights framework for private security; it is not the legal authority for an officer’s powers in a particular country.

Labor, emergency-service regulation and insurance. Use the destination-country module and the actual tender pack. The sources below are references with their own scope; they do not form a single worldwide regime. For the general method, revisit the foundations.

Put it into practice

Calculate the price for 20% of selling price as profit, then add 7,000 to cost. Calculate profit at the unchanged price and write one risk-control action.

Model answer

Total cost is 70,000. To retain 20% of the selling price as profit, price is 70,000 ÷ 0.80 = 87,500. If “Additional authorised relief capacity” adds 7,000 to cost without a price increase, profit becomes 10,500, or 12% of price. Preserving 20% would require 96,250, only where the procurement permits that price. A cost increase does not automatically entitle the supplier to a contract price increase. One unexpected absence creates an uncovered post. A reserve name without availability and required authorisation is not a working contingency. Cost a qualified relief arrangement and test its mobilisation time.

Keep this worksheet in your working file. The quiz below checks the lesson’s decisions; passing it is neither a professional qualification nor a guarantee of an award.