To determine which provider best meets the needs of the organization, it must not only follow a structured process but also create a cross-functional team, consisting of individuals from procurement, finance and real estate and facilities management (REFM). Each critical team member must possess expertise and knowledge of the areas they will be evaluating, including the plans, requirements, needs and constraints of the groups they will be representing. They have to come from the right level within the company, and the skills sets from the appropriate levels should be properly utilized to objectively evaluate all of the facts. This includes lack of bias for or against one FM service provider or another, or insourcing or outsourcing.
It is important that members are able to see the big picture and properly weigh the facts without getting lost in the details (e.g. “analysis paralysis”). Each team member needs to be able to select the right solution while weighing many different factors. In doing so, they need to ensure that the FM service provider can effectively meet current business needs, and has the capabilities to meet future needs at the right cost. Also, team members must have strong oral and written skills in order to effectively communicate with others on and outside of the team. This is particularly important when communicating plans, progress, conclusions and the basis for conclusions. Staff and organizations, especially those that may be impacted, must be kept informed throughout the process.
In addition to ensuring team members have the right characteristics, the team should be comprised of individuals from different including: procurement, REFM, finance, human resources (HR), information technology (IT), legal, environmental health and safety (EHS), and end-users. The team should operate under the leadership of a project leader and follow proven project management practices. Team member roles and responsibilities, deliverables and target dates need to be clearly defined.
In addition to the project team, a governance team with a clear charter should be established to oversee the entire selection process. One way to make certain that all project team members are properly focused is to establish FM service provider evaluation criteria and assign team members to address specific areas. This way they know what will be expected of them and where the team will be seeking their assessment.
Following is a listing of the team member groups that should be represented, as well as an outline of the role each team member should play in the selection process, including those activities leading up to the selection.
Procurement
Procurement needs to lead the sourcing related activities to ensure they are properly performed from beginning to end. Procurement should establish the process that will be followed, and guide the team through that process. Responsibilities include:
- Develop the sourcing strategy (out-task, bundle services, integrated facilities management)
- Determine what will be included in scope (services, sites)
- Serve as the project manager
- Understand the capabilities of the marketplace and current trends
- Define supplier requirements
- Oversee the RFI/RFP and selection process, including the project schedule
- Perform quality assurance of information supplied to and received from bidders
- Serve as the primary interface with bidders
- Select bidders and send out RFIs/RFPs
- Receive proposals from bidders
- Ensure all required material is submitted
- Develop the evaluation criteria
- Ensure a fair assessment is conducted
- Evaluate and score bidders with input from the team
- Prepare the business case with input from the team
- Recommend FM service provider selection
- Lead negotiations
REFM
The REFM team members are the individuals that should best understand how the company’s FM services are delivered today and what the requirements will be going forward. A large part of the selection process is preparing the data required for the RFP. The accurate and complete data will enable service providers to submit better and more concrete proposals. The primary responsibilities of REFM in this process:
- Serve as the FM subject matter expert
- Understand business needs, requirements and constraints
- Document the FM requirements
- Decide what roles are core and thus must be retained
- Provide detailed information required for the RFP – Statement of Work, service level agreements, costs, etc.
- Provide site tours to bidders, if required
- Evaluate and score bidders, especially their technical competence and ability to meet service level requirements.
Finance
Finance needs to ensure all of the financial numbers provided in the RFP are accurate and all the financial numbers received in the bids are properly evaluated. Finance also plays a critical role in preparing the financial portion of the business case to select the FM service provider. Examples of finance responsibilities include:
- Develop baseline FM cost data
- Develop an RFP pricing template
- Evaluate cost proposals from bidders
- Confirm that the service provider will reduce costs, and by how much
- Ensure the potential financial prize outweighs the risks
- Oversee the financial data included in the business case to ensure the financial impact is accurately portrayed
- Ensure the right approvals are obtained based on the dollar limit of the outsourcing contract.
HR
HR must focus on the people-related issues, especially since FM outsourcing often results in the elimination of positions in the organization and creation of new positions working for the FM service provider. With that in mind, HR needs to:
- Determine severance policies
- Communicate any hiring constraints to the bidders
- Identify impacted people (retained, as well as those that will be severed)
- Evaluate the people impact, including severance costs
- Provide severance information to impacted employees
- Prepare severance questions and answers.
IT
If using the provider’s system, company’s IT organization needs to ensure that the provider system meets company standards before interfacing the company system with that of the provider. Examples of IT responsibilities in this process include:
- Establishing the IT strategy
- Understanding business needs, requirements and constraints
- Setting the IT requirements to be included in the RFP
- Reviewing bidders’ IT technology and capabilities, including data security and business continuity.
Legal
The legal counsel plays an active role in ensuring that all legal documents best protect the interests of the company. Legal responsibilities include:
- Providing legal advise, as required
- Reviewing the RFP document prior to issuance
- Developing the contract language and terms
- Signing off on any legally binding document
EHS
The FM service provider should have an appropriate environmental, health and safety program for the in scope services. Thus, the EHS team member needs to:
- Set the EHS requirements to be included in the RFP
- Evaluate bidders’ EHS staffing and programs, their past EHS performance and their risk management program.
End-user
End-users best know the business needs and requirements. They play an important role in ensuring that the voice of the customer is heard and understood. Examples of their responsibilities:
- Communicate business needs, requirements and constraints
- Ensure user’s views are heard
- Help define service level requirements
- Evaluate and score bidders – especially their ability to meet service level requirements, as well as their cultural fit.
Creating the right team will enable the company to select the right FM service provider. A structured process ensures everyone clearly understands his/her role and all of the required activities are coordinated and performed in a systematic and controlled manner. This includes the activities prior to going to market, as well as those leading up to the selection of the successful bidder.
It is often beneficial to utilize the services of an external consulting organization with experience in the FM space. They have done this before, know what needs to be done, have proven tools and processes to guide the process, and understand the capabilities of the marketplace. They can manage the complexity of the process and ensure activities are performed in the most efficient manner. This is particularly important when the FM spend that will be outsourced is significant.
