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What happens when you don't monitor contract performance?

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If you are a facility manager (FM), you know how important it is to monitor the performance and compliance of your contractors. Whether you outsource cleaning, maintenance, security, or other services, you need to ensure that they deliver what they promised, meet your standards, and follow your policies. But what happens when you don't monitor contract performance? In this article, we will explore some of the risks and consequences of neglecting this crucial aspect of FM.

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Mohamed Ramadan

Corporate Image & Marketing Manager at ProService ?Digital Workplace & IntraNet Builder ?ISO Registrar ?Quality…

1 Loss of value

When you don't monitor contract performance, you may end up paying for services that are not delivered, or delivered poorly. This can result in a loss of value for your organization, as you waste money, time, and resources on inefficient or ineffective contractors. You may also miss out on opportunities to improve your services, reduce costs, or increase satisfaction by identifying and addressing issues early. Without regular feedback and communication, your contractors may not be aware of your expectations, needs, or preferences, and may not be motivated to improve their performance.

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Mohamed Ramadan

Corporate Image & Marketing Manager at ProService ?Digital Workplace & IntraNet Builder ?ISO Registrar ?Quality Management ?ISO 9001:2015 ?Internal Audit ISO19011 ?Digital Marketing ?Newsletter Author ?Open for Business
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You may not be able to identify and address problems early on. If you don't monitor FM contract performance, you may not be aware of problems until they have become serious and expensive to fix. This could result in you having to pay for costly repairs or replacements.

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Deepak Soni

Operations and Project Management Professional | Driving Successful Project Delivery and Facility Optimization | Continuous Learner
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The review of Service Level Agreements and contractual obligations stands as a strategic imperative. It acts as a linchpin in ensuring service continuity, quality, financial stability, and the reputation of the Facilities Management team. Such consistent evaluations empower FM teams to proactively manage service providers, maintain service standards, and protect the interests of stakeholders.

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2 Damage to reputation

When you don't monitor contract performance, you may also damage your reputation as a FM and as an organization. If your contractors fail to comply with your standards, policies, or regulations, you may face legal, financial, or ethical consequences. For example, if your contractors do not follow health and safety protocols, you may expose your staff, customers, or visitors to risks or hazards. If your contractors do not respect your environmental or social commitments, you may harm your image or credibility. If your contractors do not deliver quality services, you may lose the trust or loyalty of your stakeholders.

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Deepak Soni

Operations and Project Management Professional | Driving Successful Project Delivery and Facility Optimization | Continuous Learner
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Instances may arise where service providers refrain from fulfilling commitments, often citing a lack of expertise. However, these commitments are binding within the contract terms. When providers fall short, penalties outlined in the contract serve as a means of ensuring accountability, preventing disruptions, and preserving service quality and financial stability. Consequently, the consistent reassessment of SLAs ensures ongoing service delivery adherence to set standards. It enables the prompt identification and resolution of service quality declines, thereby safeguarding stakeholder interests and maintaining service continuity.

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3 Loss of control

When you don't monitor contract performance, you may also lose control over your facilities and services. Without proper oversight and accountability, your contractors may take advantage of your lack of attention and act in their own interests, rather than yours. They may cut corners, overcharge, underperform, or breach the contract terms. They may also become complacent, resistant to change, or unresponsive to your feedback or requests. Without clear and consistent communication, you may not be able to resolve conflicts, negotiate changes, or terminate contracts when necessary.

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Deepak Soni

Operations and Project Management Professional | Driving Successful Project Delivery and Facility Optimization | Continuous Learner
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Failure to monitor contract performance can result in a loss of control over facilities and services. Inadequate oversight allows contractors to potentially prioritize their interests over yours. This lack of attention might lead to corner-cutting, overcharging, underperformance, or contract breaches. Moreover, it could foster complacency, resistance to change, and a lack of responsiveness to your feedback. Absence of effective communication may hinder conflict resolution, negotiation for changes, or contract termination when needed.

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4 How to monitor contract performance

Monitoring contract performance is not only a responsibility, but also a benefit for FM. It requires planning, execution, and evaluation, and involves defining goals and expectations for each contract, communicating them clearly to contractors, and establishing a monitoring system. This system should collect and analyze data on the performance and compliance of contractors, and use quantitative and qualitative methods such as reports, audits, inspections, surveys, or interviews. Once the results are gathered and compared to performance indicators and targets, any gaps or problems should be identified and feedback provided to contractors. It is important to follow up on this feedback, track progress and impact of actions taken, recognize good performance, address poor performance, adjust contract terms if necessary, document the monitoring process and outcomes, share them with relevant stakeholders, and use the information to inform decision-making. All of this will help ensure that you get the best value from your contractors while protecting your reputation.

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Deepak Soni

Operations and Project Management Professional | Driving Successful Project Delivery and Facility Optimization | Continuous Learner
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Monitoring contract performance in Facilities Management (FM) is pivotal for ensuring service quality and meeting obligations. Key steps involve establishing clear metrics, conducting regular reviews, utilizing technology, maintaining open communication, documenting records, performing audits, addressing non-compliance promptly, fostering continuous improvement, engaging stakeholders for feedback, and periodic contract reassessment to align with evolving needs. Effective monitoring guarantees optimal service delivery, risk mitigation, and sustained partnerships with service providers.

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5 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?

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Deepak Soni

Operations and Project Management Professional | Driving Successful Project Delivery and Facility Optimization | Continuous Learner
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Moreover, such reviews mitigate financial risks by enforcing penalties for non-compliance, protecting against potential losses and service interruptions. Beyond financial implications, regular evaluations uphold the credibility and reputation of the Facilities Management team. These assessments not only optimize resource allocation but also enhance operational efficiency, maximizing the value derived from service contracts. Ultimately, neglecting these reviews could lead to service disruptions, financial losses, and reputational damage.

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What happens when you don't monitor contract performance?

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5

1 Loss of value

2 Damage to reputation

3 Loss of control

4 How to monitor contract performance

5 Here’s what else to consider

Facility Management (FM)

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What happens when you don't monitor contract performance?

1

2

3

4

5

1 Loss of value

2 Damage to reputation

3 Loss of control

4 How to monitor contract performance

5 Here’s what else to consider

Facility Management (FM)

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