This week has seen the launch of a set of NEC4 Facilities Management contracts designed specifically for the procurement of FM services. And yesterday, leading lights from the IWFM’s working group set up to guide the suite’s development process spoke in a webinar to explain the contact forms in more detail.
Here, we ask four key figures from the FM side to explain what they think the new suite will do for the way workplace and facilities management contracts are designed and procured in future.
Participants:
AK: Anne Kinder, senior consultant at Nodus Solutions Ltd and chair of the IWFM procurement SIG
CJ: Chris Jeffers, director – Facilities Management Advisory at Mott MacDonald
PO'F: Patrick O'Farrell, head of facilities management at Nationwide Building Society
AC: Andy Candelant, head of facilities management at Landsec Ltd
Now that the NEC4 contract model and its supporting documentation are complete, how can it be sustained as a live document set?
AK: ”The focus now changes to promoting the contract as the ‘go to’ contract for our sector and the IWFM Procurement Special Interest Group, which I chair, will be playing our role in this.”
CJ: “One of the intrinsic benefits of the NEC family of contracts is that regular updates are provided by NEC and subject matter specialists through the life of the contract. IWFM looks forward to continuing to work with NEC on developing the FM contract document set, and ensuring that it remains responsive to market need.
PO'F: ”It is incredibly important that once the FM contract is launched that the IWFM/NEC continue to collaborate to ensure the contract template remains relevant and compliant with all and any legislation and/or improvements in the world of FM. The establishment of a ‘user forum’ or ‘working group’ specifically supporting the contract’s development will be critical to achieving this goal.”
AC: “The main contract document and user guides have to remain consistent with applicable legislation and so will be reviewed periodically and when changes require. There is also a suite of practice notes, developed jointly by IWFM with NEC, providing practical advice on the implementation and use of the contract. These practice notes will be reviewed, updated and added to, ensuring that IWFM members using the NEC4 FM contract consistently have access to the latest best practice in FM contract management.
How will NEC4 change the way FM service is procured – and what are the most likely benefits to accrue?
AK: ”The contract was written by both NEC and FM experts specifically for the FM sector – it builds on the highly regarded NEC3 suite of contracts and uses FM terminology, drawn in part from ISO 41011, rather than construction terminology and it is neither sector nor country-specific.”
CJ: “Procurement of FM is often a technically demanding and challenging activity which needs dedicated resources and appropriate planning. The form of contract used is very important for all parties to understand and feel comfortable with, particularly as the key schedules are developed – the specification, the performance schedule, and pricing documents. By adopting the NEC contract for FM, much time and cost can be saved in procurement programmes, and bidders can feel less risk-averse in relation to the form of contract – the document set that will help to determine the success of the business relationship in the years ahead.
PO'F: “Use of the newly developed contract will be key to the successful procurement, subsequent mobilisation and ongoing operational management of the relationship between client and vendor. It will set the guidelines around specific deliverables, expectations on each party and the rights each has within the contract.”
AC: “The new NEC4 FM contract is the first contract available to purchase which is specifically drafted for FM services contract agreements. Previously, contracts used in FM have typically been reworded construction documents and included terms not suited to FM, requiring parties involved to interpret. This could lead to disputes, as each interpreted in a way that suited them. The new contract is FM-specific and helps to ensure that both parties have clarity on what is required, how it is to be delivered and the cost.
How might the use of NEC4 forms affect the ongoing operational relationship between client and provider??
AK: ”Common ground is generally a good starting point to any relationship and this is exactly what the contract offers both clients and service providers. Service providers currently bid for services across an extensive range of bespoke, client-initiated contracts and variations are debated (or not) and the common ground has to be created. Our experience at Nodus in supporting clients in procuring and managing FM services suggests that the consistency that an FM-specific, industry standard contract will bring to our sector will also drive improvements in contract management, something that we should all welcome.
CJ: ”Despite being a significant contributor to GDP, facilities management has not benefited from a “standard” set of terms and conditions for some time, meaning that many FM contracts are based on bespoke terms, specifications, and approach to performance – this can make it difficult to engender trust, transparency, and openness between the parties, and can lead to issues around service delivery, pricing, and perception of value. By using a contract form that is understood and trusted by both client and provider, both the procurement of FM services and the subsequent contract management of these services will benefit from a more informed position on risk, and better outcomes for all.
PO'F: “Used correctly, it will remove ambiguity and protect both parties in what sometimes can be a dynamic and complex relationship. Also, the entry level of many roles within FM means there is a fantastic opportunity for our industry to support and drive genuine social value across society and there are provisions contained within the contract to enable that.”
AC: “The NEC4 FM contract promotes collaborative relationships in FM, aligned with the ISO41000 FM standards. The new contract should help both parties to benefit mutually. Sources of potential dispute inherent in other forms of contract have been addressed to provide an FM contract which delivers transparency for the parties involved.”
Further reading:
Now > Next > How: Chris Jeffers on FM procurement
Read about the launch of the NEC 4 FM contract suite.