By April 5, 2010 1 Comments Read More →

Procuring Facility Management Services isn’t the same as Procuring Paperclips

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Procuring Facility Management services is not the same as buying widgets or tendering project work. You will live with the results, and the people who come along with the supplier, for the term of the contract.

This means it is just as important to get the right service and the right company as it is to get the right prices. You can’t use a technical approach to procuring your services like you would with a construction project or a simple price based process you might use to procure your office supplies.

Defining what you want is the first step, then you need to make sure the service provider can deliver on what you want within the price they quote. You also need to make sure they are a good fit. This includes their level of sophistication, culture, how they deal with their staff, training, image and more. These service providers will often impact your image with tenants and occupants, right up the line within your tenant organization or your company. How they perform will reflect on you. When they are successful, you will be successful.

Your procurement department, if you have one, will probably have a formula approach they use, sometimes geared to squeezing the lowest possible price out of the suppliers. While this is admirable in the current economic climate, it may be false economy. They will look like heroes and you may even look like a hero, but just wait until next year or the next. It may bite you. Procuring FM services is more complex, including the documentation, RFP questions, site tours, supplier interviews, specifications, evaluation criteria and the overall process.

Focus first on getting the correct level of service for your Facilities services in these trying times and introduce flexibility in the contract terms that will enable you to increase or decrease services with a defined pricing approach – to avoid having them under-price reductions and over-price increases in scope or service levels down the road.

Get your pricing with details you can use to effectively assess bids. This is particularly important in labour intensive services such as Janitorial. Knowing their rates, loadings, proposed hours, etc. will let you compare properly between bidders and weed out any suspect pricing practices. It also provides you with more information to either negotiate or to modify scope if the prices you get are more than your budget will permit.

When evaluating service providers, ask questions that will differentiate them and provide comfort that you can deal with them professionally for the duration of the contract. These days, being able to work with and rely on your FM suppliers is important. Under the assumption that you will only invite qualified companies to bid in the first place, they know how to deliver the service. In your RFP, you need to know about the things that help you be more successful. How tech savvy are they? Do they analyze and improve services? What's their quality control? Do they provide you with information and knowledge, not just useless lists and reports? Do they keep involved with the industry trends and innovations? Do they properly train and re-train their employees? What is their reputation? You should ask about these things and others that are important to you.

Finally, you expect more from your Facilities service providers, so find out whether they can deliver. Instead of simply telling them exactly what to do in the bidding, ask them to propose approaches and changes to your specifications that can save you money. They are the experts, so tap into their knowledge. Your specifications may be wasting money and they can suggest solutions, cost savings ideas and other approaches to improve results and may also save money. The old-style traditional supplier without any sophistication will simply do what you tell them, whether it's wasteful or not. You want someone who will think about how they can make you more successful.


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Posted in: Procurement

1 Comment on "Procuring Facility Management Services isn’t the same as Procuring Paperclips"

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  1. Sarah Fenton MBIFM, MCIPS, MRICS says:

    Some very nuanced comments here which I completely understand and am pleased to see an ally on my strategic FM approach which has been utilised broadly here in the UK.

    I am not sure if in Canada or the US you have this tragic phenomenon of sector specialists such as security providers trying to widen the net and cover all service provision? This has had terrible results of the last 3 yrs in the UK market, interesting to know your thoughts.

    Kind regards

    Sarah.

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