When I oak, I soak the chips in vodka for a day or two, then dump them in secondary. Since you're doing bourbon, oak, and vanilla, I'd soak them in the bourbon for a couple days, then add. This should kill any nasties living in the wood.
I don't know how much oak is in the kit, but I usually do an ounce. I leave it in there for a week, then I taste it every day or two until it hits the "oakiness" that I'm looking for. At that point I rack it off the oak and bottle.
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