It's all in the fine print - registrar contracts

The Fine Print – Comparing Registrar Quotations

You’ve probably received two or three quotations from CBs for their registration services. Which registrar to chose? Do I pick the low bid? The high bid? It becomes a real problem to decide, and…fear of picking “the wrong one".

We can help make the decision process a bit easier for you. There are some key factors which come into play when selecting a registrar from a list of quotations. Stepping though the factors and describing why they are important can help remove or reduce the uncertainty you face. This also helps to explain why each quotation should only be slightly different from the next. Major differences would be cause for talking to that particular registrar for an explanation. Quotations are typically valid for 90 days; this is spelled out in the contract. But, check the fine print to be certain.

How much did they charge…?

Registrar quotations are based on a three-year cycle. The first year includes the registration process – the pre-assessment (if asked for – this is not mandatory!), the Stage 1 and Stage 2 audits, and administration fees. The second and third year covers the annual surveillance audits. A caveat to this is the registrar and lead auditor may conclude that your organization needs to be audited more frequently than once every 12 months. You won’t know this until the Stage 1 and Stage 2 audits are completed, and the lead auditor provides his (or her) recommendations for registration. There may be some risk involved in your QMS health or maturity which may support the need for a follow-on audit six months after your certification audit. The registrar and lead auditor will explain the need for a more-frequent audit, and will provide the objective evidence which lead to this decision.

A surprise audit?

A problem which appears to be on the rise are auditors that mandate a repeat audit much sooner than one year “because of nonconformances that he/she wrote”. This appears to be driven primarily by money – revenue for the registrar and income for the auditor (travel and expenses). Unless the nonconformance was such a major issue to warrant suspension of the certificate or there is inadequate assurance the client QMS is stable, there appears no formal need for an auditor to come back in 6 months - or sooner! - and check on the situation.

One well-known registrar has taken to quietly embedding its authority to conduct unannounced surveillance audits, at client expense, into the fine print. If you refuse to allow the audit, you'll be even more surprised with the invoice you'll get...including travel expenses for all in the audit party. Always read the fine print.

Why does each quotation show a different number of audit days required for the Stage 1 and Stage 2 audits?

The registrar’s assessment team develops an audit plan based on the information you provided to them concerning your company maturity, employee headcount, proposed QMS scope, and whether or not “Design and Development” (Clause 7.3) was excluded. All things being equal, the quotation/information forms for all the registrars should have been filled out consistently. For Stage 1 and Stage 2, all the quotations should reflect about the same number of audit days..and about the same pricing for audit services.

For some registrars, a half-day for report writing is often explicitly itemized. Other registrars will lump the report-writing time into the Stage 1 or Stage 2 audit days. The quotations should explain this clearly. If you have any questions, please ask the registrar about it.

They want a deposit before the audit?

Yes, smaller registrars consider this as a financial commitment on your part. The deposit can vary – some charge $250 while others may charge more. In the long run, this is of little importance to the overall cost of registration.

What about these Maintenance and Accreditation Fees?

Yes, this is an excellent source of revenue for registrars. “Maintenance fees” can exceed $1000 per year, and accreditation fees - $250 per year. Ask the registrar if these can be reduced or waived completely. You’d be surprised!

Payment Terms

Some registrars will bill Net 30 while smaller registrars bill Net 15. Interest is charged after the end of the “net” period, at sometimes wildly varying interest rates. There may also be late payment penalties as well as for bounced checks. The details will be provided in the payment conditions section of the registrar’s contract.

Contract cancellation terms

This requirement can represent one of the most-overlooked terms in the registrar’s contract. The registrar schedules its auditors well in advance to guarantee that you will have the right auditor available for your company and to ensure a steady revenue stream for the registrar and auditor. If you must cancel or reschedule, the registrar now loses potential revenue from the audit and the auditor also loses income from the cancellation. Not only that, you may have to reimburse the auditor for air fare which he/she already paid for.

Registrars will ask that you give specific notice of cancellation – in writing - so that you can avoid being charged fees and penalties. Some registrars may allow as little as 14 calendar days’ written notice. Most require at least 30 calendar days’ written notice. One well-known registrar charges a penalty of 25% of remaining contractual audit costs, and all yet-to-be-booked travel and miscellaneous expenses, no matter how much notice you provide. It definitely pays to read the fine print and to compare all the quotations for this particular condition.

Internal registrar requirements?

This is a problem which has been overlooked but is gaining more visibility on Linkedin forums. Some registrars require that the client – you – comply with their own requirements for management review meetings, internal audit schedules…and more.

If you don’t catch this before you sign, then you are contractually bound to the registrar requirements that will trump how you implement and use your QMS. For example, there are reports of registrars forcing clients to perform internal audits to “an annual schedule”, and in LinkedIn forums, clients are discovering that the registrar expectations will diverge from the audit requirements specified in ISO‑17021. For example, if you implement your internal audit program to a more frequent cycle than once a year, and the fine print limits you to an annual audit program, you would be in violation of the registrar contract, and possibly face penalties – and even audit nonconformances being issued. Just because.

Remember, your QMS must comply with statutory requirements. This means complying with the terms and conditions of your registrar contract – and any internal registrar requirements. It’s all in the fine print.

If in doubt, talk to the registrar. Get explanations in writing before you sign.

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