RICS draft code of practice - Procurement of facility management

Procurement of facility management code of practice

1 Introduction

1.1 Scope

This code of practice (CoP) is aimed at property professionals involved in a facility management (FM) procurement process either within their territory, region or globally). This includes property managers, directors of estates, heads of FM, consultants, RICS-regulated firms acting for a landlord and FM suppliers procuring services from subcontractors.

This CoP is also aimed at professionals who have already decided to outsource FM services, whether single-sourced, bundled or TFM/IFM services (see Glossary), or those who have previously outsourced services and are engaging in a re-procurement process. It excludes FM strategy and the most appropriate sourcing of FM services, which are addressed by the RICS guidance note, Strategic FM Framework, 1st edition. This CoP does not address the process of deciding whether to outsource or provide services internally and other relevant standards should be consulted.

The CoP provides guidance on the various factors that need to be considered throughout a procurement process, including activities and key decisions during planning, procurement and post-procurement. It aims to:

  • help the professional choose an appropriate procurement route and
  • consider the various factors in delivering an effective procurement process that results in a successful contract with benefits for both the client organisation and the supplier.

For RICS-regulated firms procuring FM on behalf of a landlord, care should be taken to comply with the latest edition of the RICS professional statement, Service charges in commercial property, 1st edition.

1.2 Structure

This CoP is divided into four parts.

  • Key principles - a list of key principles in the procurement of FM.
  • Planning - guidance on the various planning activities that should be undertaken and decisions that should be made before going to the market for facilities services.
  • Procurement - guidance on the activities and key decisions that should be undertaken during a procurement process.
  • Post-procurement - guidance on activities that should be undertaken post-procurement.

1.3 Why use procurement?

The aim of a procurement process is to access external expertise by selecting a service provider that is best able to deliver the services required by a demand organisation (DO). These services are provided over a defined term, at an acceptable cost to the DO and with optimal commercial and legal terms for both parties, while maintaining or improving quality and service levels.

For a procurement process to be successful in the long term, careful planning needs to be undertaken before going to the market, including developing strategic objectives (see RICS Strategic FM Framework, 1st edition) concerning what the DO wishes to achieve and a clear description of the services to be procured.

A successful procurement process is also a key stage in developing a successful relationship between the DO and supplier, which is critical to achieving strategic and operational objectives.

Key elements of a successful procurement process include:

  • openness to challenge and insight from the marketplace
  • a detailed understanding and clear statement of the DO's requirements, including the wider business strategy
  • detailed information about the property portfolio, assets, the facility services to be provided and the organisational culture
  • an target for what the client wishes to spend on the services and defined quality levels
  • a realistic timetable for undertaking the process and
  • alignment with any in-house delivery and the contract management function.

1.4 What the market is looking for

Globally the FM supply market is looking for buyers with a clear strategy, objectives, well-defined requirements, a well thought-out and structured procurement process and transparent evaluation criteria. The FM supply market is also looking for DOs with a willingness to seek out external expertise as to how they can deliver services. Bidding costs are high and margins low for suppliers and, in a highly competitive market, clients can maximise interest in their procurement processes by demonstrably following good practice.

1.5 Public sector

For professionals working in the government or public sector, care should be taken to meet the appropriate government or public-sector procurement directives in the territory in which they are operating. This guidance does not attempt to replicate the existing government or public-sector procurement directives. The most appropriate, up-to-date guidance on the directives in the relevant territory should be followed.

1.6 Private sector

In most territories, no specific directives apply in the private sector, although guidance from professional bodies in the relevant territory or best practice from other territories should be consulted or adhered to where mandatory. Many organisations have internal policies and guidelines that should be followed, and the underlying principles of equal treatment, non-discrimination and transparency should form the foundations of any process to maximise competition.