We had a large client ask us for background searches (through their preferred vendor and at our expense) several years ago. I'll share with you part of our reply:

1. Background checks and employee review is already being done within our company.  If we agreed to your new requirements, it appears that we would (at a minimum after the first two year period) have to purchase background searches through your service provider.  This would be redundant, and the additional expense would have no value to us. *IF* we were to agree to the requirements, we would expect <company> to pay the expense.  To take this a step further: if all of our clients required this, and we had to use their preferred search provider, we would have to obtain background checks from dozens of service providers to satisfy the requirements.
2. Your requirements state that we would need to transmit the background searches for each of our staff to you, and to do so every two years.  As an independent contractor, this is an unreasonable requirement and one that sets a disturbing precedence. We service hundreds of clients, and I’m quite certain that our staff would take issue with us transmitting their background searches to our clients – whether it be one or hundreds of clients.  We have an obligation to protect our staff’s personal information, as well as our clients. Furthermore, is <company> transmitting the background searches for all of its internal staff to all of its clients? I would expect nothing less than a mutiny from your staff if you did.
3. While we have every confidence in our staff, we have to ask the question: What would happen if a background search on one of our employees turned up something that was unacceptable to <company> or any other organization?  Would <company> then dictate that we terminate such employee?  We feel that this crosses the line of our independent contractor status, allowing <company> to have a say in our hiring practices.
4. Are these new requirements being equally applied to offshore contractors that <company> utilizes?  If so, we’d like to know how <company> can reliably run a background check on individuals outside of the United States.
5. Is there a legal requirement resulting from new regulation that necessitates <company> having background checks on file for independent abstractors?

In the end, we did not comply with their request - and saw no change in the amount of work they send us.