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Is your custom research project being subcontracted? – Necessity or an unknown chain of NDA’s?

Articles/Opinions

2020-06-01
What risks arise when custom research subcontractors are included in the project? How to protect your company against the risks associated with employing subcontractors by a research agency? What provisions in the cooperation agreement are necessary in case of consent or lack thereof for cooperation with subcontractors?

A common practice in the custom research industry is inviting subcontractors to cooperate on all or selected projects. There is absolutely nothing wrong with that. Sometimes such an approach may have significant benefits for the client (e.g. lower cost, shorter deadline or greater flexibility).

 

But such solutions are only beneficial if the research agency that wins the order is fully professional. And this means, among others, that from the very beginning they inform their client about the possibility of engaging with market research subcontractors and indicates the advantages over their own staff (e.g. bigger experience, knowledge of the local language, narrow specialisation).

 

What risks arise when market research subcontractors are included in the project?

 

From time to time, however, it happens that the client does not know about subcontractors – neither at the stage of contract negotiations, nor even during the implementation of the project. It also happens that the research company itself during the initial interviews with the client is not aware of the need to involve subcontractors (e.g. due to staffing restrictions during periods with increased workload or due to the lack of sufficient knowledge of a topic or methodology). The worst situation is when the research agency deliberately conceals the fact of a competence gap in a given field, focusing only on finalising the order and postponing the problem of conducting the project for later.

 

There is one more important risk – market research subcontractors receiving an order from the initial research agency are not always the last link in the process. They may also commission all or part of the work to other companies, freelancers or students. And thus, there is a higher possibility of poor quality, unbelievable results and wrong business decisions taken on the basis of unreliable data.

 

See also: Custom market research must be carried out by experienced people 

 

How to protect a company against the risks associated with employing market research subcontractors?

 

Of course, the cases described above are extremes. Projects are not always at risk when subcontractors are involved, because many of these companies, freelancers and even students are experienced specialists in their industry. Nevertheless, the risks mentioned earlier should be remembered when a starting cooperation with a new research company. And it's worth asking them a few more questions:

 

1. Will subcontractors be involved in the project? If you do not want this, add such a requirement in the agreement with research agency.

2. Will the subcontractors be other research agencies or freelancers?

3. Who will be the subcontractors (name, address, website)?

4. What experience and references from customers have each of the subcontractors?

5. What projects (topics, methodologies, geographical scope) have been conducted so far by each of the subcontractors?

6. Why are each of the subcontractors needed during this particular project?

 

In addition, a company should always sign a NDA agreement with the research agency. It should regulate all key aspects of cooperation. Among others, define the terms of cooperation with subcontractors and oblige all entities and persons involved in the project to maintain confidentiality, and in specific situations also ask subcontractors to sign a NDA agreement with the research company or their client.

 

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