RICS draft code of practice - Procurement of facility management

Procurement of facility management code of practice

5 Post-procurement

Once a procurement process has been completed there is still much work to be done to ensure the successful operation of a contract.

5.1 Contract management

Following a procurement process, DOs should have robust contract management procedures. Contracts that are not managed properly are at risk of failing even when an effective procurement process was undertaken.

Good practice in effective contract management involves:

  • a single point of contact
    • a structure that fits with the partner's structure
    • regular dashboard reporting to provide an overview of activities
    • read-only real time access to partner's systems
    • data analysis to identify problem areas
    • regular face-to-face meetings to foster good communications
    • joint inspections/walk rounds to encourage joint working
    • use of technology (GPS, photos, PDAs, remote monitoring, etc.)
    • focus on a customer service ethos
    • strong sense of purpose/strategic direction
    • shared objects (contract management, supplier and key subcontractors)
    • continual professional development of contract management staff
    • continual review and improvement of processes and systems
    • procedures for checking that service costs are consistent with performance being delivered with evidence of redressing any issues
    • separation of specifying and delivering discretionary works
    • checking changes to test if there are reasonable grounds for making a formal change, e.g. performance or VFM will be improved; changes are consistent with customer requirements and alternative options are considered, which may not lead to cost increases (e.g. existing labour redeployed or reprioritised to accommodate change in requirements) and
    • clear regional and global leadership, governance and reporting where applicable.

5.1.1 Management structure

A contract management structure should be designed to match the contract. It should include an experienced senior manager with overall responsibility and enough staff required to deliver the contract management functions. For example, if a DO plans to undertake quality audits, who is going to undertake this activity?

The role of the contract management function includes:

  • management of the performance of the contract (information, data, reporting)
  • financial management of the contract, including budgeting and payments
  • management of contract compliance
  • management of supplier relationships, including with supplier key subcontractors
  • management of change and culture
  • delivery of the DO's overall objectives, value, capturing outcomes and
  • responsibility for keeping the DO's buildings safe, compliant and fit for purpose.

For regional or global procurements DOs should consider how to manage the regional or global contracts and supplier relationships in addition to managing the services within territories. Poor performance in some territories of a regional or global contract may require specific focus and input to communicate with local stakeholders.

It is important to remember that although the activities have been outsourced to the supplier, the DO still has responsibility to ensure that requirements are met.

5.2 Re-procurement

Towards the end of a contract term DOs will have to decide what to do next. Options should be considered well before the end of a contract term to allow time for a re-procurement process or other change to the model if that is the decision reached.

Options typically include:

  • a contract extension (public-sector procurement directives permitting)
  • a re-procurement of the same contract
  • a re-procurement of a changed/updated contract or
  • bringing services back in-house.

To make an informed decision, DOs should go back to the planning and strategic stage as outlined in section 3.