How can you manage FM contract risks in public-private partnerships?

1 Understand the contract

The first step to managing FM contract risks in PPPs is to understand the contract thoroughly and clearly. You should review the scope, terms, conditions, obligations, incentives, penalties, and dispute resolution mechanisms of the contract. You should also identify the key performance indicators (KPIs) and service level agreements (SLAs) that measure and monitor the quality and quantity of the FM services. Additionally, you should familiarize yourself with the roles and responsibilities of each party, as well as the communication and reporting channels.

2 Assess and mitigate the risks

The second step is to assess and mitigate the risks associated with the FM contract in PPPs. You should conduct a risk analysis to identify the potential sources, impacts, and probabilities of the risks. You should also prioritize the risks based on their severity and likelihood, and develop risk mitigation strategies and contingency plans. Some common risk mitigation techniques include allocating and sharing the risks, transferring the risks to third parties, reducing the risks through preventive measures, and accepting the risks as part of the contract.

3 Monitor and review the performance

The third step is to monitor and review the performance of the FM contract in PPPs. You should establish a performance management system that collects, analyzes, and reports the data and information related to the KPIs and SLAs. You should also conduct regular audits, inspections, and evaluations to verify the compliance and quality of the FM services. Moreover, you should provide feedback and recommendations to the service provider and the public entity, and implement corrective actions and improvements as needed.

5 Resolve the disputes and conflicts

The fifth step is to resolve the disputes and conflicts that may emerge from the FM contract in PPPs. You should adopt a collaborative and constructive approach to resolving the disputes and conflicts, and avoid escalating them to legal or arbitration proceedings. You should also use the dispute resolution mechanisms specified in the contract, such as mediation, negotiation, or adjudication. Additionally, you should document and record the disputes and conflicts, and their resolutions, and learn from them to prevent or minimize them in the future.

6 Foster the partnership and trust

The sixth step is to foster the partnership and trust between the public entity and the service provider in the FM contract in PPPs. You should maintain a transparent and open communication and information exchange with the other party, and respect and acknowledge their interests and perspectives. You should also recognize and reward the achievements and contributions of the other party, and share the benefits and risks of the FM contract. Lastly, you should seek and create opportunities for mutual learning and innovation, and enhance the value and sustainability of the FM contract.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?