What are the eight principles of FM procurement?

19 October 2020

A trade body has launched a new global code of practice for the procurement of facilities management (FM) that aims to “drive consistency, transparency and clearly defined requirements”.

The code, from the Royal Institution of Chartered Surveyors (RICS), said good practice was underpinned by eight key principles across planning, procurement, contract management, and re-procurement (contract extensions). It will come into effect in January 2021.

The eight key principles are:

1. There should be a defined, detailed scope of the services being procured, defining what is and is not included.

2. The buyer should state clear objectives for the procurement project and the subsequent operations.

3. The buyer should provide bidders with enough data and information to allow them to respond with robust proposals.

4. The evaluation criteria should reflect the buyer’s objectives.

5. The buyer should develop a pricing structure stating what services and costs are included, what is excluded and how changes will be calculated and agreed.

6. There should be specific and reasonable timescales for the procurement process.

7. The buyer should detail a payment mechanism and commercial terms that are transparent and fair.

8. All parties are required to comply with relevant legislation and rules that apply in the territories where services will be provided, for example data protection.

The code said: “For regional or global procurements, buyers should aim to have consistent specifications but recognise that there will be variations in service requirements between locations, territories or regions as industry good practice and other requirements will be different.”

RICS recommended that buyers “seek assurance that fair and transparent payment and other commercial terms are being applied to the supplier’s subcontractors, with requirements agreed with the supplier being mirrored with any subcontractors”. 

The code was created through collaboration with a working group which included representatives from the private and public sector, such as mining firm Rio Tinto, John Lewis Partnership, construction and property consultancy Gardiner and Theobald, real estate firm CBRE, and the Crown Commercial Service. 

Kath Fontana, president-elect at RICS, said: “Successful procurement is about much more than cost. By encompassing value in its broadest sense, this new code for facilities management procurement will drive consistency, transparency and clearly defined requirements to the benefit of clients and asset users across society.”

Paul Bagust, global property standards director at RICS, said: “By 2027, the global facilities management market is forecast to be worth $1.62 trillion. RICS has sought to enhance professionalism in the sector and this new code will support effective and ethical procurement – based on clearly defined criteria and consistent, transparent processes.”

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