Facilities Management Contracts: A Few Things to Know

Analysis

Whether it is an airport, industrial facility, power station, hospital, commercial tower, residential project or any other asset, for a project to retain its value, be attractive to its users and function as intended, it must be operated and maintained properly. This is normally done through the appointment of a facility manager under a facility management contract.

Regardless of the type of facility, it is important to ensure that the facilities management contract contains certain key provisions to ensure that the facility management contract properly fulfils its required purpose.

Scope of services and the consequences of breaches

The primary rule for any facility management contract is that the precise scope of the facilities management services to be performed by the service provider are clearly set out in the facilities management contract (typically in a schedule), together with the relevant Key Performance Indicators (or KPIs) which the service provider is required to achieve.

Such KPIs should be SMART - Specific, Measurable, Achievable, Relevant and Time based. They need to be clearly defined as well as capable of being assessed objectively.