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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 some years, our members have been asking for a standard contract for FM. Best practice developed by our Procurement Special Interest Group was supplemented by a 2016 Leaders Forum, Outsourcing Across Borders, led by our International SIG, that articulated the rationale and benefits of an FM standard contract which would promote best practice.
In 2018 we agreed a joint collaboration with NEC to develop contracting and procurement products and services to support the facilities management sector, using the NEC4 contract suite. Following consultations with our members and the work of the volunteer members of our NEC Steering Group to validate the FM element, the NEC 4 Facilities Management Contract (FMC) is now available.
This suite of contracts, with supporting user guidance, is intended to provide more integrated and consistent procurement strategies for the procurement of FM services, reflecting the wide variation of requirements that the sector needs today and in the future. Fundamental elements, such as collaboration and value, are built into the standard contract which is applicable for use worldwide. Others, including social value, because of their UK-specific focus, are being developed by the Steering Group into practice notes, which will provide guidance on how to build the concepts into the new contract.
IWFM will maintain an FM Contract Forum to further enhance the contract and to ensure it reflects future developments in best practice. In addition, we will support the wider adoption of the contract - and procurement upskilling - by promoting the contract and its supporting products and services, including training, across the sector.
The FMC’s four key benefits are:
- it helps to streamline processes, reduce the potential for problems and promotes best practice in the procurement of FM services
- as the first FM standard contract, it brings greater alignment with FM priorities, including market recognised phrases and definitions
- it offers flexibility to support a variety of FM approaches in procurement and delivery strategies
- it fosters the building of trust, good relationships and collaboration, which is vital to a well-functioning facilities management industry and the key ingredient for achieving successful outcomes.
IWFM Membership benefits: our members are entitled to discounts up to 15% off the cost of the NEC4 FMC and 10% off the NEC4 Introduction to FM one day training course. A complimentary copy of the contract is included with the public course. Different arrangements apply for in house delivery. To claim your discount code, please get in touch with our Member and Customer Engagement team at [email protected] or call +44 (0) 1279 712 650.
Additional resources
Practice notes: To support users of the FMC on a range of important region and sector specific issues, IWFM and NEC are working together to produce a series of practice notes. Here are the practice notes that have been published so far:
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.
If you have any comments or would like further information on this content hub, please email [email protected]