Helpful Hints on Working with Foreign Vendors
Due Diligence/Experience. You will need to conduct more due diligence for a foreign vendor than you do for a U.S. vendor, in part because you may not be able to rely on other recommendations from peers. Additionally, thorough due diligence is very important to make sure you don’t run afoul of certain U.S. laws such as the U.S. Foreign Corrupt Practices Act, that you usually don’t have to worry about when dealing with U.S. vendors. Because you are often setting up the relationship without stepping foot in the country, this can be difficult.
Below are examples of the types of questions you should ask:
- What experience do they have in performing the work requested? Do they have the necessary expertise and capacity (e.g. sufficient number of employees or facilities) to handle this job?
- If it is a travel agency or similar travel vendor, have they handled groups of your size before?
- Do they have employees, or do they subcontract the work? If they subcontract, what aspects of the work are subcontracted? What is their process for performing due diligence on their subcontractors?
- Can they provide references from other U.S. customers?
Certain foreign vendors could be prohibited parties, meaning that the U.S. government does not allow you to work with them. Always screen partners against prohibited parties lists maintained by the U.S government. More information on prohibited parties and due diligence generally for foreign vendors is available here.