Print Contract Negotiation In-Depth
Comedian Steven Wright asks a volunteer from the audience to assist in a juggling routine, and the novice messes up one of the tosses. Wright says, “No, no. It’s my fault. I picked her.” This is worth remembering when negotiating a printing contract—you did, after all, pick your printer. But unlike in comedy, mistakes your printer makes aren’t so funny.
Contract negotiations can define your relationship, so you want to conduct them wisely.
First, you need to negotiate the right to negotiate. There is a tendency for printer or publisher to claim that difficulties will never arise, as if citing the possibility in a contract would be some bad magic spell. Printers say you don’t need protection from a certain calamity because they are so trustworthy the event will never arise; publishers say those pesky default provisions just don’t apply to their reliable companies. Both arguments undermine the value of the contract, which is designed to let both parties agree, in advance, on the best and fairest resolution of potential problems, and to anticipate, creatively and conscientiously, the consequences.
In that sense, the contract must be equitable for both printer and publisher. It’s not a way to harm an adversary or a device for fixing blame, but a statement of obligations in three general areas: performance, cost and security. In this multipart series, we’ll look at each of theses areas with a focus on developing provisions that will protect a publisher while establishing a positive relationship with the printer.
The three performance points with the greatest impact on your magazine are: what the work is, when it’s to be done and how well it’s to be done—specs, schedule and quality. The contract allows you to define your requirements clearly and to address the consequences of a failure to perform.
The contract should include both a clear definition of the volume and production attributes the publisher sets and the performance tolerances and tasks the printer is to undertake. Bear in mind that every time the contract requires the publisher to deliver something meeting the printer’s specs, you need to know what those specs are. Get details on submission of page files, mail.dat files, inserts and paper, and obligate the printer to provide timely, written updates when such specs change.
To clarify the printer’s services, you’ll want to define the prepress workflow, allowing for future modifications for new technology, and the printer’s distribution services, such as routing, freight preparation, securing carriers and negotiating freight rates. Also include performance tolerances, such as binding-trim variation, and press fold and dot-registration ranges.
After assembling this mighty stack of specs, it occurs to you: Over the life of the contract, you may well want to change frequency, page count, binding method, paper basis weight or trim size. The contract can cover key aspects of such changes as well. First, reserve an opportunity to review prices if the volume of work passes a certain threshold. Most important, negotiate a right to terminate the agreement in the event the printer can no longer produce the work under new specifications, whether it’s an odd trim size or an increased frequency that doesn’t fit the plant.
This termination provision has an inequitable aspect. Even if the printer has steadfastly met all his obligations, the publisher would have a right to leave, and over changes that haven’t yet occurred. Those with dark imaginations could even use the provision to break a contract by claiming the specs would change and then failing to implement the change.
But even if the printer legitimately resists this provision, you need the right to alter your product and to use a supplier whose plant is truly suited to produce it. The printer should have the right of first refusal to revise prices, schedule and equipment to maintain the account, but if you cannot mutually agree on the terms for a publication with revised specifications, you must secure the right to move the work. Otherwise, the printer is confining your product to its capabilities alone.
Inspection of All Materials
If you’re working from the printer’s boilerplate agreement, it’s likely it never touches on the printer’s obligations to inspect materials the publisher supplies. Printers are justifiably concerned about making inspections that amount to warranties regarding the suitability of third-party materials. The receiving dock doesn’t want to take responsibility for your other suppliers, but because you have no opportunity to verify shipments yourself, you must rely on the printer to check fundamental attributes.
Assign the printer only practical responsibilities, and be specific. For page files, for example, a typical PDF workflow means the publisher must solve all the pesky problems of color content, bleed and trim, fonts and trapping. If you want the printer to provide preflight inspection, state your requirements and add the cost to the price schedule. If not, the printer’s obligation begins and ends with telling you he’s missing page 36.
Binding materials and publisher-supplied paper are another matter. In both instances, the printer should be obligated to inspect and report receipt within a defined period of time, perhaps as promptly as 24 hours, perhaps a more generous 72, depending on your publishing schedule and paper-ordering practices.
The printer will need reasonable limits on the scope of inspections. For binding materials, ask for a check for gross transit damage, a rough weighing to verify quantity against the bill of lading, and conformance to samples or identification of the inserts you provide. Accept the fact that the printer is not going to dig through an entire skid to ascertain that the perfume smells as sweet on each scent strip, or that every blow-in card is trimmed squarely. Your insert printer or advertiser has to accept responsibility for the quality of the work; the printer has to determine that the right inserts arrived in suitable condition.
Publisher-supplied paper is quite a hot potato. The printer’s attorney would prefer to stay at arm’s length here and have the stock befoul the press before he jumps in to save you from a mill mistake, for the simple reason that if he fails to spot a problem he might begin to share in liability for it. But on a practical basis, the legal anxiety can be trumped by the need to keep the plant productive.
The contract can state that the printer is obligated to inspect paper for defects detectable before production, such as crushed cores or moisture damage. He is not considered liable for identifying defects that can only be found when the paper is used.
Now the hammer comes down. You must rely on the printer’s inspections, and any failure to report defects that can reasonably be found before production constitutes acknowledgment that the materials conform to specifications. The publisher will be liable for costs or idle time resulting only from defects that cannot be detected in advance.
Timeliness has no shades of gray, but it’s a mutual obligation of printer and publisher, so the contract includes commitments on both parts. The production schedule is subtly linked with the specifications, and the production cycle times are technically limited to the range of pages and counts stipulated. When drawing up the specs, bear in mind that you are balancing some conflicting goals: You might want to negotiate a price break (and would therefore specify the lowest realistic press run), but you also want the schedule to accommodate the biggest volume.
You can address pricing tiers in the contract itself rather than stinting the count in the specs and trying to earn a price cut later; this way, the production schedule can reveal any potential limits in turnaround time at the outset.
The production schedule is based on the printer’s current equipment and plant load. Over the course of the contract, new technology and productivity improvements may well allow a faster turnaround, so when you work with the printer to set a new schedule each year, be sure to seek improvements. The contract should only be a baseline: the cycle time will never be greater than what’s originally defined, as long as the volume remains the same.
The term “overtime” seems to define itself: it must occur after the regular work day. But in a 24/7 printing plant, how could it arise? There are two causes of bona fide overtime, and your contract can specify whether and when either applies to your magazine. The first is work in the hours when the plant actually is closed or operations are scaled down, such as holidays or weekends in plants that don’t run at a 24/7 pace. The second is work requiring crews or equipment in excess of what’s normally required to do the work, such as an extra binding line.
The printer’s boilerplate may be peppered with vague entitlements to overtime charges, but you will want to eliminate such open-ended references, pin down the conditions, and require the printer to advise you in advance that overtime has become necessary and obtain your consent to a rough estimate of the extra cost. Note that the printer may elect to use overtime to solve his own scheduling problems, but not at your expense unless you have caused the delay.
Stay tuned for Part II of the “Print Contract Negotiation In-Depth” series, focusing on cost, in the June issue. PE
Alex Brown is a consultant to magazine publishers specializing in manufacturing and magazine management. She founded her consulting company, Printmark, in 1984, and is a frequent speaker at industry events.