Strategic Advice: Contract Bundling
The Facilities Management market has undergone a transformation in recent years, with a move toward larger integrated service bundling or Total Facilities Management (TFM) solutions. This has been reflected in a move by Facilities Management organisations into Integrated Facilities Management providers capable of self-delivery of a large range of services. Larger bundled or TFM Contracts feature the outsourcing all of the non- core services to a limited number or single Service Provider(s), depending on client requirements, for an extended contract term. The fundamental ethos of this approach is to transfer operational and supply chain risk to the party best placed to control it, the Service Partner(s).
This approach permits the introduction of performance led incentivised contracts, which through introduction of Key Performance Indicators (KPI's) ensure that any service delivery failure, and their consequences, sit with the Service Provider.
As this trend has continued, with Provider consolidation and FM solution complexity increasing, Client's have looked to their technical advisors for increased support and advice. GTFM are at the forefront of delivering performance driven mechanisms that ensure the client's requirements are accurately reflected within the contract documents and include appropriate risk transfer with sufficient performance controls This simplification of the relationship between the client and the Service Provider and the passing to the Service Provider of responsibility for every aspect of service delivery relieves the client of a management burden allowing them to concentrate upon its core business.
Such contracts features:
- The creation of headline or principle providers who have complete supply chain responsibility.
- Introduction of effective self-monitoring through the intrinsic linking of performance to the Service Providers reward.
- Optimisation, multi-skilling and multi-tasking deliver operational and cost benefits
GTFM deliver tangible benefits to their clients through such contractual relationship that include:
- Optimisation of the operating economy, in-house versus outsource
- Large scale risk transfer
- Operational and cost benefits through supply chain consolidation
- Introduction of performance driven contracts using performance indicators
- Increased accountability on open book accounting basis
- Achievement of long term cost certainty
- Continuous improvement through re-calibration of the Key Performance Indicators
- Effective risk transfer to the Service Provider
- Living, concise documentation which permits service evolution