Monitoring Building Operations and Maintenance Contracts

Something as innocuous as an HVAC contractor who forgets to sign in and out can throw off your performance measurements next RFP. That’s why facilities managers should track such discrepancies by better monitoring operations and maintenance contracts, thus ensuring the best service at the lowest costs.

“You want to make sure that service delivery succeeds, rather than simply waiting for problems to occur,” says Michel Theriault, the principal of Strategic Advisor, a facility and property management consulting company in Ontario, Canada.

Why bother?
For one thing, contracts are meaningless unless you ensure the agreements laid out in them are being met. In a worst-case scenario, a solid monitoring system lets you know when to terminate the contract early or deduct from payments based on poor performance.

On a brighter note, a variety of methods can help improve operations throughout the entire facility.

Take benchmarking, a method for comparing a contractor’s cost, cycle time, productivity and quality. According to the Benchmarking for Facility Management Handbook, published by the International Facility Management Association (IFMA), establishing benchmarks helps break the organizational mold “because it encourages companies to look outside themselves for identification of better practices, change, and improve processes.”

Common monitoring methods
Benchmarking: If it’s your first time establishing benchmarks, the handbook recommends comparing readily accessible data. “The purpose is to monitor what you’re paying and competitors are paying to get the best prices,” says Terrence Rollins, CEM, CPMM, CSDP and property manager for the Newark, N.J.-based General Services Administration, the federal government’s largest real estate building management organization.

Customer satisfaction surveys: Theriault recommends relatively easy techniques such as using Survey Monkey or other online software that can track results on a transactional basis. Another suggestion: leave a survey card on the customer’s desk and ask him or her to bring it the completed survey to the front office.

Surveys can also help establish percentages within benchmarks in order to identify corrective actions. For example, “A four percent backlog is commonly quoted as a reasonable backlog target for preventative maintenance,” says Theriault, so if a performance report turns up an eight percent backlog, consider targeting that area for improvement.

CMMS: A Computerized Maintenance Management System (CMMS) can automatically produce spreadsheets that track inspections, instructions, check-lists, and maintenance as well as costs, helping to set future benchmarks.

Key Performance Indicators (KPIs): These high-level measurements of how well an organization is functioning are linked to the needs of your core business. They may trigger penalties and incentives that end up driving future behavior.

Balanced Scorecards: According to Rollins, at some companies facilities managers attend board meetings and help develop balanced scorecards, which mix financial measures with the company’s overall mission. Increasingly, “the twenty-first century facilities managers also need to be financial managers,” he says.

Audits: In addition to letting you know if you’re in compliance with codes, regular audits alert you when technology needs upgrading, says Rollins.

Random surveillance: Following a random sampling in a boiler plant, Rollins found out operators were trying to adjust boilers without proper combustion analysis tools. The discovery and remediation ended up decreasing pollution and lowering utilities costs by 10 percent, he says.

Savings incentives
“Awarding based solely on the lowest tendered price may cost you more by the time the contract term is up,” says Theriault.

The savings occur in what you don’t end up spending due to mistakes. Neglecting to post a fire monitor when a plumber is using an open flame could result in a fire. A shoddy shoveling job could land you a law suit. “Failure of service always costs money,” he says.

Confronting breaches
If a contractor breaches a term in an agreement, be sure to follow the appropriate steps in resolving the issue.

In a previous, a janitorial supervisor left one of Rollins’ sites for a month. “We asked them to replace the person, but they didn’t, and now the quality of cleaning is going down,” he says—despite the fact that the contract required them to provide a replacement.

Rather than taking matters into his own hands, Rollins had a contracting officer and senior property manager review the contract before responding to the company, resulting in a fee deduction.  

Setting quality standards
There are many ways to measure quality, and even a questionnaire based on the perception of work done might determine whether you’re meeting your goals.

When Theriault worked for a service provider, a new contract required his company to improve customer satisfaction for a full range of services, from mechanical to janitorial to grounds. At the end of the year, Theriault recalls, the customer was surveyed with questions such as, “Were the washrooms left in a clean state?” and “Were you dealt with in a professional manner?”

Since the responses were more positive than those the previous year and he achieved his targets, he was awarded a bonus.