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Best practice in procurement
Pursuing the highest standards in the procurement and management of facilities management contracts is fundamental to our profession’s success and advancement. Managing the relationships so that partners can deliver on the desired outcomes means that contracts themselves are key tools to successfully creating the necessary collaboration and outcomes between organisations.
The workplace and facilities management profession is still relatively new and for much of its life has been driven by a cost-driven culture and the rapid acceleration of outsourcing as a standard operating model. These factors have shaped the relationships that workplace and facilities professionals have with suppliers. As the profession has grown and matured, establishing best practice across its ever-widening remit and responsibilities requires products and services that support the FM professional environment.
Carillion’s collapse in 2018 was a pivotal moment for the profession, highlighting pervasive problems - such as low margins and a narrow focus on cost rather than value - embedded in the procurement process and contract management. Many voices across the profession and beyond called for better practices and a change in culture; concepts such as trust and collaborative working were widely advocated.
Other needs were also identified, including promoting social value, upskilling those who procure and manage contracts, and best practice in contractual relationships to minimise risk.
IWFM identified six areas of focus:
- a value-driven collaborative approach, incorporating quality and social value, which delivers for all stakeholders
- enabling realistic margins
- up-skilling for professionalised procurement processes
- advocating consistent, prompt payment
- advocating wide ranging minimum standards underpinned by a code of conduct
- promoting transparency about the service delivery, which enables trust between partners.
NEC4 Facilities Management Contract
For several years, IWFM members called for a standard contract for facilities management (FM). This work built on best practice developed by IWFM’s Procurement Special Interest Group and the 2016 Leaders Forum report, Outsourcing Across Borders, led by the International Special Interest Group. The report outlined the rationale and benefits of a standard FM contract to support best practice across the sector.
In 2018, IWFM entered into a collaboration with NEC to develop contracting and procurement products and services for the facilities management sector, using the NEC4 contract suite. Following consultation with members and validation of the FM-specific elements by volunteer members of the NEC Steering Group, the NEC4 Facilities Management Contract (FMC) was launched.
The contract was developed to support more integrated and consistent approaches to the procurement and delivery of FM services, reflecting the varied requirements of the sector, both in the UK and internationally. It incorporated fundamental principles such as collaboration and value, with supporting guidance intended to help organisations apply best practice. The work also explored how concepts such as social value could be incorporated into FM procurement through supporting practice notes.
Although the NEC4 FMC is no longer available and IWFM’s partnership with NEC has concluded, the initiative represented an important step in addressing the sector’s call for a standardised approach to FM contracting and procurement.
The contract was designed around four key benefits:
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Streamlined processes and best practice: helping to reduce the potential for problems and promote good practice in the procurement of FM services.
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Alignment with FM priorities: providing a standard contract that reflected the sector’s needs, using recognised FM terminology and definitions.
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Flexibility: supporting a variety of procurement and service delivery approaches.
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Trust and collaboration: encouraging positive working relationships and collaboration, which are essential to successful outcomes in facilities management.
Additional resources
1. Including Social Value in the FMC - produced in partnership with the Social Value .
2. Including the Living Wage in the NEC4 Facilities Management Contract (FMC)
4. NEC contract TUPE practice note
Webinar: our Introducing the NEC4 Facilities Management Contract webinar featured a panel of procurement professionals, each of whom had contributed to the development of the FMC, discussing its importance for the FM profession and taking viewers’ questions. To watch the webinar click here and to read the session Q&As click here.
Government policy and legislation
Through our engagement with Government consultations, inquiries and reports, we put forward our views - and those of key stakeholders within our profession - on best practice in procurement. Our responses and submissions help to articulate the value that the workplace and FM sector can add to both the public and private sectors through service delivery.
Most recently, IWFM submitted this response to the Cabinet Office Green Paper on Transforming Public Procurement, welcoming many of the framework principles, but also stressing the need to embed social value and prompt payment within the core of any new regulatory framework.
Other IWFM responses to Government consultations and inquiries:
Social value in FM
Today’s business leaders increasingly look beyond an organisation’s financial bottom line, demanding greater scrutiny and transparency of its approach to social value. FM providers are more frequently being asked by clients, in both public and private sectors, to deliver social value as part of their contractual performance and impact. Equally, they have their own genuine desire to operate as modern, socially responsible businesses.
These trends are backed by our own Sustainability Surveys which have identified a move away from the tick-box culture towards the importance of longer-term environmental and social impacts, and to move the provision of FM services from a cost-based focus to one based on value. Indeed, the 2018 survey highlighted the redefining of a new sustainability agenda, comprising not just environmental concerns, but also embracing economic and social measures such as pay, diversity, modern slavery and wellbeing.
National TOMs Facilities Management Plug In
Our Sustainability Surveys and a Leaders Forum Discussion Paper on Social Value in FM (link here) supported by our Sustainability SIG, also highlighted a growing call from the profession for a commonly-agreed industry definition of social value and a standardised framework of financial and non-financial metrics. This would help FMs to define what our profession’s broader impact and relationship with society is in terms of the jobs that we create, the environmental improvements we make and the technological solutions we provide.
We therefore formed a collaboration with the Social Value Portal and National Social Value Taskforce to develop a new measurement framework for social value, designed specifically for the workplace and FM profession. Known as the FM Plug in for the TOMs (Themes, Outcomes, Measures), this tool aims to unlock social value measurement and management in the FM sector, helping organisations to measure and maximise the social value they create through the delivery of their services, as well as to allow organisations to report value created as a financial contribution to society.
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