Sustainable Facilities Management

 

Refining, Improving & Sustaining Performance

 
Performance Based Service Provision - Contracts & Specification

A Performance based a contract based on actual performance; it aligns the motivation of the contractor with the client’s needs and goals.

Performance Based Contracts vs. Standard Contracts. Performance Based Contracts address the limitations of standard maintenance contracts:

  • Inflexibility - Standard maintenance specifications are not tailored to every site and contain elements that are:
        -  uneconomic (too much maintenance)
        -  inadequate (too little maintenance)
        -  inappropriate (wrong maintenance)
  • Fixed fee – With no incentive to improve, the local knowledge of technicians is not always tapped.
  • Imbalance of Risk - The service provider receives payment on completion of specifications, even if the outcome is unfit for the client's needs.
The Performance Based Contract approach:
  • Focus on output vs. input
Measure output - what is achieved for the client rather than just what is done: using Key Performance Indicators (e.g. energy consumption and costs, internal conditions, limiting down-time, response times for callouts).
  • Drive profitability 
Contractors become stakeholders by being directly rewarded for savings and/or value they achieve for their clients.
Performance Based Service Provision Brochure