Maximising Value for Defects & Repairs - Verified

Maximising Value for Defects and Repairs

In the dynamic world of facilities management, there’s a growing concern over the increasing costs associated with repairs and maintenance. Traditional industry practices continue to obscure pricing transparency for labor and parts, thus creating a financial strain on facility budgets. This trend impacts not only immediate costs but also carries long-term financial implications for businesses. Consequently, the urgency to ensure cost-effective facility management has become more pressing than ever.

Procurement Practices Stifle Value 

The Fundamental Issue – A Flawed Contractual Relationship

Facility Managers are pressed for time and face significant barriers when engaging suppliers to carry out defects and repair work. The procurement process makes defect and maintenance work difficult, time consuming and resource intensive.

Standard industry practice often sees Facility Managers locked into Preventive Maintenance (PM) contracts. Whilst these contracts facilitate the delivery of ‘periodic’ PM in a facility, it consistently results in the incumbent PM contractor receiving all Reactive Maintenance (RM). Standard industry practice is for contractors to underprice PM contracts to gain the more lucrative RM jobs that flow from it. These RM jobs can be charged at very high rates as FM’s have limited resources to get comparative market quotes.

The contracts consist of intense procurement and contract management hurdles to ensure compliance with procurement rules and policies. Despite having extensive contractually binding documentation in place, this relationship creates fundamental service delivery issues including:

1. Over-reliance on Incumbent Contractors With Non-Competitive Pricing: : The time-consuming process of onboarding new contractors under PM contracts often leads to an over-dependence on existing contractors. This in turn often results in inflated prices and a lack of competitive pricing.
2. Difficulty to Track Service Delivery Cost & Quality: There is a significant challenge in tracking agreed-upon parts and labor prices, including agreed markups. This difficulty contributes to financial and operational losses, as facility managers struggle to ensure that maintenance work meets regulatory standards and quality expectations.
3. Complex Contractural Landscape: The scope of standard PM contracts often excludes Reactive Maintenance (RM), leaving urgent repairs unaddressed. The intricate nature of these contracts creates a gap in service delivery, where RM work falls outside the contractual agreement, posing challenges in addressing immediate maintenance needs.
4. Transparency and Compliance Issues: Ensuring maintenance work meets regulatory standards and quality expectations is challenging without transparent reporting and auditing. Facility Managers often find themselves with overwhelming paperwork and unverifiable claims.
5. Cost Control Tracking and Monitoring Challenges: Facility managers frequently face challenges in controlling and monitoring pricing markups by contractors.
6. Administrative Overload: The process of manually tracking and validating contractor work imposes a significant administrative burden. This manual approach consumes time and is prone to errors, complicating the management of maintenance tasks.

Facility Managers are already time poor and face significant barriers to engaging suppliers to carry out defects and repair work. The procurement process makes defect and maintenance work difficult, time consuming and resource intensive. FM’s need support to get facilities work done in a compliant, timely and cost-effective way but the procurement process hinders this outcome.