What are the best practices for ensuring all parties understand their contractual obligations in FM?

1 Clarify the scope

Establishing a clear and detailed scope of work in FM contracts is essential for avoiding misunderstandings, gaps, overlaps, and changes that can affect the quality, cost, and timeliness of the service. To clarify the scope, you should define the objectives, deliverables, standards, and performance indicators of the service, as well as specify the roles, tasks, and authority of each party. Additionally, you should identify the resources, equipment, and materials needed for the service; outline the processes, procedures, and methods to be followed; and establish communication, reporting, and feedback channels.

2 Negotiate the terms

Carefully reviewing and negotiating the terms and conditions of FM contracts is essential in order to build trust, cooperation, and satisfaction among the parties. Such a contract should be fair and balanced, as any one-sided or ambiguous contract can lead to disputes, claims, and litigation. When negotiating the terms, you should review the contract carefully for any risks, gaps, or inconsistencies, seek legal advice if necessary to ensure compliance with laws and regulations, communicate your concerns, expectations, and interests clearly and respectfully, seek mutual benefits that address the needs and goals of both parties, and document any changes or agreements in writing before signing the contract.

3 Monitor the performance

Performance management is a third essential aspect of FM contracts, which measures and evaluates the provider's service delivery according to the contract. A consistent and transparent performance management can help ensure quality, accountability, and improvement of the service, as well as identify and resolve any issues or deviations. To monitor the performance, you should use the performance indicators and standards defined in the scope as a basis for assessment. Additionally, data and feedback should be collected from various sources and methods, then reported and communicated clearly. Recognizing and rewarding good performance is also important, as well as addressing poor performance and implementing corrective actions or adjustments when needed.

4 Manage the changes

A final key aspect of FM contracts is the change management, which handles any modifications or variations to the contract that may arise during the service delivery. A flexible and responsive change management can help cope with changing needs, demands, or circumstances, as well as enhance the value and efficiency of the service. To manage these changes effectively, it's important to establish a clear and formal process for requesting, approving, and implementing them. Additionally, you should evaluate the impact and feasibility of the proposed changes on the scope, terms, and performance of the contract. Negotiations should be conducted regarding the costs, benefits, and risks of the changes with the other party. Furthermore, it's essential to document and communicate the changes and their implications to all parties, as well as update the contract and performance indicators accordingly.

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?