This Blog focuses on What Buyers should consider when sourcing FM services in the context below:

• The FM services market
• Important factors to deliver the best client services
• Culture alignment
• Business objectives
• Size of a company
• Self delivery TFM
• Contract objectives
• Conclusion

A previous Blog focussed on typical FM delivery models. The next Blog will consider “What Should a Buyer Expect from an evolving FM Market”.

The Market

The FM Provider Market includes substantial multinational, self-delivery companies to “fleet of foot” international management companies, “boutique” FM suppliers targeting specific markets within a country or even regions within a country.

With the right risk transfer and client engagement, it is a capable market able to deliver a complex range of services. These range from high-volume labour-intensive services to specialist services that ensure organisations are compliant; these services enable clients to deliver core business objectives. We do not believe there is a single best model for all clients; it will depend on many factors including:

• Business service requirements
• Location of property portfolio
• Capability of supplier market
• Capability of in-house resource
• Size of contract
• In-house FM systems 
• Attitude to risk
• Attitude to cost

Some of the issues that clients should reflect on when outsourcing FM services are discussed below. Whilst acknowledging that this list is not exhaustive, it provides an introduction to some of the issues that will need to be considered during the outsourcing tender process.

Culture alignment is often identified as a key criteria to judge suppliers but is often difficult to define what aspects of a company’s culture needs to translate into the requirements of the client. For example, a creative business does not necessarily need a creative FM supplier – it merely needs a supplier that understands the FM model that support a creative business. A good starting point is to ensure that an organisation has particular track record in markets and can demonstrate they understand the issues in that market.

It is important for clients to understand where in the business cycle the client organisation is and what its objectives are. This potentially helps to identify the company who can best support those objectives. For example, there are companies who differentiate their offer on cost and organise themselves to deliver services in the most efficient way possible.

However, this approach often means there is limited resource for thinking creatively and FM companies with this approach are less likely to be able to respond to quality issues the client has. Others focus on particular markets and are seeking to be very knowledgeable about these particular markets and ensure they have systems that support the compliance issues for that market. This may mean the service is more relevant to a business at any given point in time but is almost certainly not going to be the lowest cost at a given point in time.

Size of Company and how FM Suppliers make you an important customer is one of the key factors in any relationship.

If you are a relatively small client of an FM company, it will often be the case that you will receive less very senior management time than the larger clients. Some of the smaller suppliers on our list may focus on particular client types and can provide the twin benefits of expertise in certain markets and senior management accountability.

However before dismissing the larger turnover companies you should also consider to what extent you may fit into their business model; a company that is vast in global terms may be smaller in the client geography and you may be an important client in particular geographies. Equally, some major suppliers seek to create small businesses within their overall structure ensuring that client’s have immediate access to a senior manager (with autonomy to make decisions) who has a vested interest that their client accounts are successful.

There are a number of arguments for and against “Self-delivery TFM”. Those advocating self-delivery would argue that this can reduce margin on margin (although this is not always the case as each business unit in a multi service organisation will need to make margin). Equally it is arguable that any self-delivery organisation can be equally capable across multi geographies and multiple services so may be less value for money than specialist sub-contractors supporting management organisations. Value in all cases should be determined by the actual tenders received including their approach and their cost and should not be judged on perceived generic disadvantages and advantages.

Clients should also consider how they can ensure that the contract incentivises the right behaviours and aligns with contract objectives. For example, what commercial terms / contract are you going to use (Fixed Cost, Cost Plus, Target cost etc) and what tools should be in place to manage performance (Service Credits, FM Systems and Processes, Performance Management etc).

Importantly, clients should not only view outsourcing just from their own perspective. They also need to sell the opportunity to the right part of the FM market to ensure that they receive the best offer from the market and attract the right level of competition. This can include understanding the market to make sure that the size and scope of the offer is appropriate for the market through to making sure that proposed risk transfer does not put off the supply market. 

In Conclusion

The FM market is mature and flexible enough to support a wide range of client requirements. However, it should be understood that all suppliers will have their limitations as far as geography or services or commercial risk etc. We have observed (from afar!) ITTs (invitations to tender) fail to attract ANY bidders because the industry could not (or would not) deliver what was asked for. When procuring, clients need to ensure that what they present to the market is actually deliverable, does not result in significantly higher cost – and preferably attracts more than one relevant supplier.  Equally clients need to ensure that the FM delivery model chosen not only supports market appetite but is also able to achieve the client objectives with appropriate risk transfer. 

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This Blog focuses on typical FM delivery models in the context below:

• The Market
• Typical FM Delivery Models
• TFM (Self delivery / sub contract mix)
• TFM (Self Delivery)
• TFM (Sub-Contract)
• TFM (plus Specialist Service)
• Managing agent / integrator model
• Management In-house single service or bundled outsourced delivery
• Management In-house, bundled / single service outsourced delivery
• In-house management and delivery
• Role of intelligent client
• Conclusion

Subsequent Blogs will include:

• What Buyers should consider when sourcing FM services.
• How the FM Market is evolving and what a Buyer should expect from an FM provider

The Market

The FM Provider Market includes substantial multinational, self-delivery companies to “fleet of foot” international management companies, “boutique” FM suppliers targeting specific markets within a country or even regions within a country. 

With the right risk transfer and client engagement it is a capable market able to deliver a complex range of services. These range from high-volume labour-intensive services to specialist services that ensure organisations are compliant; these services enable clients to deliver core business objectives.

Typical FM Delivery Models

We have shown below some typical models that clients adopt. Nearly all of the suppliers in this paper offer TFM either by offering predominantly self-delivery or by sub-contracting some or all of the FM services. The broader the range of services and the greater the international geography of the portfolio the more likely that the TFM services will include some sub-contracting of major FM Services. Equally, a lot of the suppliers included will provide single FM services or bundled services as well as TFM. We have also included some suppliers that are large service delivery companies that tend to offer single services (eg cleaning) or bundled services and not TFM.

The following show a number of TFM models that typically a supplier may propose when FM services are tendered.

One of the most common TFM models delivered by the market includes a combination of self delivery and subcontract mix (See Figure 1 below). Historically suppliers evolved from a single service eg catering, maintenance etc. and as they have grown their facilities management capability, they have added other services. However, often suppliers either do not or cannot demonstrate a core competency in all service areas and across all geographies. This then leads to either strategic partnering with specialist suppliers or sub-contracting as client requirements develop. Typical organisations in this category would be CBRE, JLL, Sodexo.

Some companies in the market are seeking to develop a self delivery model of all FM services (See Figure 2). To achieve this they will need to restrict their offer to certain client types / geographies as this model is almost impossible to implement across a diverse global portfolio. Typical organisations in this category are Anabas and Salisbury and CloudFM. Some of the larger FM companies have hybrid models where they have strengths in self delivery in some locations but will supplement this with a sub-contracting strategy elsewhere such as CBRE, JLL ISS and Engie.

Equally other organisations focus on investing in the management and FM systems and developing relationships with suppliers to deliver the majority of the FM services through their supply chain. (See Figure 3). Typical organisations in this category are Mace Macro and Cushman & Wakefield. Those organisations who have a sub-contracting model are more suited to widely spread portfolios which may include both large and small properties. 

Often clients may believe the market cannot support particular services effectively as part of a TFM offer and choose to separate out certain services even if all the other services are procured as part of a TFM model (See Figure 4). The most popular services provided outside of a TFM model include catering and security. 

The final model included in this paper where management is outsourced is a managing agent / integrator model (See Figure 5). This is where the client has separate contracts directly with the management company and the FM supply chain. Typically, organisations that would otherwise sub-contract services such as Mace Macro and Cushman & Wakefield would be the type of organisations that would deliver this model. Those organisations that pre-dominantly self-deliver would be unlikely to want to deliver this type of model unless the scale of the management service is very large. For example, Sodexo were appointed to provide an integrator service for a large Government Department.

The following models are where the FM Management is retained by the Client Organisation. 

In the following model (See Figure 6) the client employs specialist service providers for each of the main FM services. In this type of model the Client will need to have appropriate FM systems in place to ensure that management information can be combined in a consistent way to understand and manage overall performance.

Sometimes clients may believe that bundling services will benefit their delivery model (See Figure 7). For example, one organisation combined security with first response maintenance because each location needed security guards but their security role was not sufficient to keep them busy all of the time. Equally the diverse geography of the estate meant that the maintenance response time for minor issues would mean the business requirement was not met. In this case the solution bundled security and maintenance with the same supplier.

It is rare to have all FM services delivered by the client organisation (See Figure 8) if only because most organisations see it as something that is not core to their main service and do not want to invest money in systems, people and plant to ensure that they have a service that is as efficiently and effectively delivered as the FM market. An exception is the Higher Education estate which is often perceived to be core to their offer and also the FM market has the disadvantage of the client having to pay VAT if the market delivers the service and not having to pay VAT if it is delivered by the University.

Role of intelligent client 

In each of the models above is a separate Intelligent Client role. This is an important role for any organisation and by definition needs to be independent of the outsourced suppliers and very knowledgeable of the occupier’s business. In some cases this has been outsourced to specialist consultants but in the main is a function provided by the client itself.

A helpful description of the role is included in the “Office of Government Commerce Principles of Contract Management: Service Delivery” which identifies that the Intelligent customer capability needs to combine “in-depth knowledge of the (client) business and understanding of what the provider can and cannot do. It is vital that the individuals or teams responsible for managing contracts on the customer side have this kind of capability. The aim is to reduce misunderstanding between customer and provider and to avoid problems, issues and mistakes before they happen.”

We believe a strong Intelligent Client role is important, as clients should not abdicate responsibility to collaborate with supplier to deliver the service. Just outsourcing a service does not provide the “business” guidance that is necessary for a successful contract.

In Conclusion

The FM market is mature and flexible enough to support a wide range of client requirements. However, it should be understood that all suppliers will have their limitations as far as geography or services or commercial risk etc. There are a number of different models that Buyer’s can procure and it is important for the Buyer to understand the most relevant for them. The next Blog in the series considers. What Buyers should consider when sourcing FM services.

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Mace Macro had commissioned a report on the Workplace . 

Procurement, people and productivity: a new dawn for the workplace?

It is time to think differently about how we create work environments. Influential research has found that only one in two employees thinks their workplace helps them to be more productive, and argues that more effective workplaces could boost the economy by tens of billions of pounds. Yet too often the procurement of workplaces has a narrow focus on minimising cost, rather than creating the conditions for employees to thrive.

Whilst addressing this is important to the future success of the economy, there is a bigger picture for companies to consider. Improving the workplace experience is about more than just getting better outputs from employee inputs. It is also about remaining competitive in a changing world. Different attitudes to work and new ways of working mean that employers need new approaches to attracting, retaining and inspiring highly-skilled people. As such, improving the workplace experience should be part of any strategy to succeed in the so-called ‘war for talent’.

Other members on the panel were:

• Mark Holmes, COO for Consultancy at Mace
• Denise Harrison, Director of Global Corporate Properties at Invesco.
• James Pellatt, Director of Workplace and Innovation at Great Portland Estates
• Scott Spanton, Chief Operating Officer of property Standard Chartered Bank
• Tim Oldman, CEO of Leesman

He is currently supporting DWP with their commercial exit from the £11bn PRIME Contract.

“Procurement, people and productivity: a new dawn for the workplace”
Synopsis:

The synopsis for the research report and the event is as follows: 

Procurement, people and productivity: a new dawn for the workplace? 

It is time to think differently about how we create work environments. Influential research has found that only one in two employees thinks their workplace helps them to be more productive, and argues that more effective workplaces could boost the economy by tens of billions of pounds. Yet too often the procurement of workplaces has a narrow focus on minimising cost, rather than creating the conditions for employees to thrive.

Whilst addressing this is important to the future success of the economy, there is a bigger picture for companies to consider. Improving the workplace experience is about more than just getting better outputs from employee inputs. It is also about remaining competitive in a changing world. Different attitudes to work and new ways of working mean that employers need new approaches to attracting, retaining and inspiring highly-skilled people. As such, improving the workplace experience should be part of any strategy to succeed in the so-called ‘war for talent’.

Introduction

My talk will argue that it is not a good starting point to assume any strategy must include “improving the workplace experience” irrespective of the wider business drivers.

Taking the synopsis from the “Procurement, people and productivity: a new dawn for the workplace” report I thought I would focus on the following three areas to illustrate my thinking.

• Talent War
• Productivity
• Strategy

I’ve taken the workplace as the physical offices, factories, hospitals, houses that we work in and the FM related workplace services (maintenance, cleaning, catering). I have not included the enabling IT infrastructure, robotics in a warehouse etc.

Talent War

With a talent war I suppose that we must first consider whether our respective organisations are in a talent war. I suppose most of us would agree that there is a war for talent at the moment whether it is strawberry pickers, nurses, engineers, research scientists. Hopefully my mention of this range of talent shortages conjures up a different vision than just Google workplaces.

Mark Price Former Minister of State for Trade and Investment. Deputy Chairman The John Lewis Partnership, undertakes workplace happiness research. He believes that Workplace Happiness is hugely correlated to how people respond to the following questions.

Are you:

• Being developed. 
• Treated with respect
• Proud to work for your organisation
• Doing something worthwhile
• Sure the business cares for your well being

When I spoke to the Millennials in my family they agreed with Mark Price’s list and said they moved to organisations because they provided:

• Good career prospects
• Good training
• Flexible working
• Good pay
• Good reviews by employees
• Company Brand

Note workplace was not a major driver. 

When I then asked them to put it in the context of workplace they tended to focus on things that I would consider “Herzberg hygiene factors” – things that are reasonable to expect and may cause dissatisfaction if they are not present.

• Minimal unnecessary commute – obviously within their control.
• Ability to be cool in summer and warm in winter
• MFD (photocopier) working and full of paper (okay, I admit that was my one)
• Access to sales systems so that I know about my clients
• Good environmental control and recording to ensure that my experiments aren’t wasted
• Finding a flexible working desk easily and not being kicked out by a senior manager
• Good quality chair so my back doesn’t hurt
• Meeting rooms that work

They weren’t looking for workplace apps, bean bags, fresh fruit, coffee bars, concierge, dry cleaning and bottles of water etc.

Is the talent war for ever and always? At the moment we are in an interesting place economically; GDP is not growing significantly but we are close to full employment. There are seismic shifts in some industries such as retail, otherwise it is an economy that is stuttering along, waiting warily for the future to arrive. 

And the future risks are significant. EU instability with political opinion drifting to the extremes and Italy looking to potentially derail the Euro. Trade wars between the two biggest global economies. Global oil supply impact with the re-introduction of Iranian sanctions. A Brexit which has potential extreme outcomes of talent unavailability from the EU to such a major curtailment of talent demand that it doesn’t matter. Add in artificial intelligence and robotics and I would suggest that anyone that says that “workplace experience” should always “be part of a strategy to succeed” can only be living at a given point in time for a particular company.

Every business should work out the resources it needs and how to get them. Potentially this may mean property and workplace is an important part of business investment. 

However, workplace is competing with more HR investing directly in attracting staff or more direct technological improvements to business operations– there is only a finite pot of money. Rich, talent seeking companies are at the extreme, Google giving a key message that we care for your wellbeing, look at our offices is unusual and for good reason.

Productivity

It is not always easy to measure correlation between workplace and impact on productivity. However, it is easy to see where workplace makes us less productive for the organisations we work for.

Technology tends to have the most obvious impact on any increased productivity. Business operations will tend to focus their decisions of how to use technology to increase productivity, rarely on property to increase productivity.

However, poor productivity can be caused by poor workplace. For example, a painful meeting room process, photocopiers empty of paper, teams not located together (that need to be) because of space constraints, difficulties finding hot desks, commuting to meetings during work hours (because of home working and limited teleconferencing), queues in cafes at lunchtimes. For the company this position is exacerbated if this wasted time is high earning staff. But even relatively low income personnel (eg call centre) may mean that you have to recruit more to cover peak times if you are not allowing them to efficiently take breaks.

Strategy

The workplace should support productivity. Or at least not inhibit it.

Any good strategy must consider where we are now and where we need to be. Any business should consider whether their current workplace is supporting productive working.

There is then a big leap to say that every talent strategy should include improving the workplace

Workplace strategy cannot (no should not) be done in isolation. Ideally you need to have intelligent strategic thinking across business operations, HR, IT and property and even more importantly they need to communicate effectively – organisations are not always good at this – with property and FM being no better than the others.

FM should stay close to HR / IT / Finance / business operations. It is important to truly understand the workplace customer as their perception changes all the time. It is also important that you make time to communicate within your business.

Often, I find the problem in a lot of organisations is that corporate real estate, HR, technology and business operations do not share important data to work out the best blend of investment to resolve business problems. This means that decision making is often taken in business silos.

We (workplace professionals) have potential access to a wealth of great information that is rarely combined to give business intelligence such as space, occupancy, how people move around a building, service satisfaction, financial information, visitor numbers. HR and IT can help with where people travel from to, where and when technology is used etc. Rarely is data (let alone “big data”) used in strategic workplace planning. 

Occasionally I do come across good integrated workplace planning practice but often this is driven by crisis or severe cost pressures. For example, at a County Council when they were looking at reducing costs all of the departments were consulted, individuals were analysed for working patterns (could child service space (mainly afternoon interviews) be shared with social care space who mainly had their briefings in the morning. IT was consulted to see if the service could be delivered in different ways such as home working, location of people was assessed by HR to see impact of where people lived on proposed working policy. Some typical items they considered were:

How would library services be provided. Libraries could be cloud based, book based or support enhanced library services? Each option will impact on property costs but potentially may impact on costs elsewhere in the organisation

Could Social services be only home based; what would they need to enable productive working such as video conference. What would be the alternative cost and benefit be if they were or office based would require meeting space.

Conclusion

Like any business case it is important to determine where you are going to get the most return on your investment. I recognise that some companies see workplace gives them competitive advantage in the war for talent; but this is not for every organisation all the time. There needs to be a clear business case to invest in great working facilities.

I am not convinced that great facilities really turn people on (they would have to be very exceptional); but recognise poor workplace can form part of the frustrations that turn people off an organisation. One thing I would say is that if the workplace is not meeting the workplace policy requirements for each business then workplace experience should be absolutely part of any strategy – if you truly know that it meets these hygiene requirements then the business probably has better things to focus its strategic efforts on.

From the talent war perspective and the productivity perspective the best strategies for workplace and facilities need to be read in conjunction with HR and IT strategies. Potentially so long as the company / organisation has a workplace policy identifying minimum workplace expectations you only need an experience strategy when you are not meeting these expectations. To truly understand this, we need to know impact of other incentives in the war for talent. The combatants in the war for talent have to recognise that there are many ways to win this war. 

Finally, to understand the best tactics and strategies it is important that organisations have good information and data to ensure that any workplace strategy is selecting the best strategies to increase productivity and support the talent war.

Read more on this subject via: Mace Insights 2018. PROCUREMENT, PEOPLE AND PRODUCTIVITYw

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contributors are Emma Coss, Ian Elliott and Mick Mahon. 

Against Service Credits 

Emma is currently supporting a major Government Department to commercially exit a PFI contract. Ian’s experience includes head of Department of Trade and Industry Estates and Managing Director for an FM contractor. Mick was European head of property, FM and procurement for Bank of Tokyo Mitsubishi for circa 16 years.

Service credits are a pre-agreed regime of credits that are paid where the supplier fails to achieve defined service levels. These service levels are established specifically for each contract. The contract will include performance indicators which demonstrate if service levels are being achieved and the level of service credit due if they are not. Typically, they are calculated on a periodic basis (say monthly). Often, they have a cap eg profit in month so that they cannot be seen as a penalty.

They are an exclusive remedy for performance within the cap and are a form of liquidated damages that punishes poor performance without having to go through a lengthy contractual process.

The most important benefit of having service credits is that it focuses supplier effort to delivering client requirements. The supplier market is not always consistently good and often does not provide the right level of service unless pressurised. Service credit is a useful tool in this process. Service credits, even in the most collaborative contracts, ensure that there is a clear understanding of when a line is crossed and provides an early warning to ensure appropriate escalation.

Service credits are even more important where there is a limited chance of a collaborative contract. For example, with PFI contracts where the number of parties is large and their vested interests diverse it is useful for the end user to know that there is some leverage that ensures even the smallest voice can be heard. 

It encourages both parties to evaluate the risks inherent in any FM contract and to ensure that these risks are understood by the client and supplier and that the supplier shares in the “business” risk of these services not being delivered.

In conclusion I believe Service credits where used properly can provide clarity of requirements and can provide a realistic remedy and escalation route where there is service under-performance.

Against Service Credits

For the record, I am not a supporter of service credits. I see it as a licence to fail and painful to police. I feel it focuses suppliers on options to mitigate their cost risk, which is inherently negative to any long mutually beneficial relationship. That said, I have not had to manage low margin diverse public sector / PFI type contracts, where supplier relationships may not be so strong or even valued by the client and service expectations are low. In which case the service credit “stick” may need to be formally baked into the arrangement, but I’m not convinced. 

My view is always that you get what you pay for. If the supplier is making low / no margin on the contract you will have very little leverage on service delivery as they will be relaxed about termination of the contract. If you are reasonably valuable to the supplier you’re ability to influence their service performance is strengthened. I would rather be clear about the service I’m paying for and performance I expect and police that arrangement with a positive, light touch review process such as ‘PAIRS’.

For me this highlights two things. The first is the importance of the tender / procurement process to ensure your service expectations can be reasonably delivered for the contract cost you are willing to pay, if you are paying for bronze do not demand gold. The second is the nature of the relationship you want with the supplier and the time / effort you want to invest in managing it. Planning to beat suppliers up with service credits from the outset is not a good place to start. The ultimate supplier sanction for continuous service failure should be losing a valuable contract. 

Against Service Credits 

The starting point is a philosophical one of how you intend the contract to run. Almost certainly a rigorously enforced Service Credit process will inevitably lead to a less collaborative relationship with a greater focus on conflict to address service performance. Practically speaking this will also mean that the supplier will focus on the performance score (no matter how badly the measures were originally contrived) and will focus less on the overall relationship. Equally, ‘stick’ rather than ‘carrot’ mechanisms are likely to create negative/aggressive rather than encouraging/supportive management cultures within the supplier; punishing credits rather than applauding bonuses. Within organisations, there is a reason why pay performance bonuses are common and pay deductions are not.

To ensure that service credits are agreed each month will require a significant resource; almost certainly the supplier will ensure the commercial resource is focussed on challenging service credits. Surely it is better for both parties to use this resource to improve performance and use other contractual remedies where there is significant failure.

At a practical level it is very difficult to get the right measures in place at the start of the contract that are appropriate for the whole life of a contract and due to the nature of Service Credits they are more difficult to change if both parties are thinking how Service Credits will penalise the supplier. This often means that service credits will not encourage appropriate behaviours because the measures are “wrong” in the first place.

Legally speaking if set too high service credits could in theory amount to a penalty and therefore be unenforceable; if set too low suppliers may commercially accept the service credit and provide a failing service because it is commercially advantageous. Equally service credits can encourage risk-aware pricing where the suppliers’ charges are designed to accommodate failure. This is undesirable from both sides and risks undermining good will and potentially causing the client to pay more overall than they need.

In summary service credits, depending how they are applied can be highly contentious and difficult to negotiate. They are often overly complex and lead to an inappropriate focus. Uncertainty over what should properly be measured can lead to resources used to re-invent the wheel. Service Credits often operate as a frustrating barrier and rarely provide a realistic remedy.

Service Credits on your next FM contract.

Firstly, clients should decide whether including service credits makes sense on their contracts and they understand the downsides of using them.

If you decide service credits are going to be used on your FM contract it is important to 

• Be realistic about what could and should be measured and that the regime is suitably limited in scope and not too complex
• Make sure that there are alternative remedies in your contract as some breaches are simply inappropriate for a credit regime; focus on the thresholds at which other remedies become available
• Ensure that regimes are thoroughly stress tested 

It should be noted that even if you don’t have a service credit structure you will need to identify clear service levels and measure them. Your decision is not whether to manage performance (which you should) but whether you invest resource into establishing and administering service credits.

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So far there has been a dearth of effective standard contracts in FM. A number have been developed over the years but few appear to have gained traction. Some of these contracts include NEC3 (more about this later), GC/Works10 Facilities Management (2000), CIOB’s Facilities Management Contract etc

A ‘standard form’ is a contract published by an industry body, recognised by that industry’s participants, containing established and generally accepted terms and conditions. The construction industry uses a variety of successful standard forms, including JCT and NEC. The FM sector has more limited options regarding standard forms.

Standard forms can result in more efficient procurement and fewer misunderstandings because both parties are familiar with the risk profile and can instead devote their time to genuinely commercial issues. The greater the amendment the more legal expertise required by the contracting parties to ensure there are no unintended consequences.

If the construction industry has embraced the use of Standard Forms why has the FM sector not encouraged their use as well? Having worked in both FM and Construction I tend to find FM less adversarial (possible exception of PFI – which is another story) Also, no matter which lawyers draft the contracts, a well drafted FM contract normally has very similar clauses. 

A few of my clients have looked to use Standard Forms in the past. One, a pharmaceutical business opted for NEC3 but then spent a lot of time and effort developing the Z Clauses. 

The other, a major firm of lawyers, chose to update GC/Works10 Facilities Management (2000), because “it was easier to update an old contract than it was to add Z Clauses to the NEC 3 contract”. The principal NEC for FM document is the NEC3 Term Service Contract (TSC). The TSC is a ‘standard form’ of contract, intended for the use in the provision of any type of service and therefore suitable for use when appointing a facilities management supplier. The TSC has also been endorsed by the Facilities Management Board of the Cabinet Office UK.

My concern with this standard form for FM is that it is not a genuinely standard Form ie it cannot be used off the shelf; it needs major input from lawyers. Any FM form of contract that requires you to put in Z Clauses for issues such as how TUPE should be managed, what are the expiry and handover requirements at the end of the contract etc is not a genuinely standard form. It’s okay for Government who have enough contracts to warrant the legal resource to develop their own “Z Clauses”.

For most of the rest of the FM client market, whilst still expensive, it is often easier to get off the shelf “lawyer” contracts than it is to add clauses to NEC. My view is that standard Forms of Contract need to ensure both clients and their supply chain perceive there is a fair balance of risk. Equally, the FM industry must be able to use it without needing to add clauses necessitating significant input from lawyers.

So fingers crossed that the RICS develop something that can be endorsed by the FM industry and reduce the reliance on bespoke contracts.

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