The FM market is undoubtedly on its historic ride, with significant activity on new tenders and an impressive pipeline with a barrage of new proposal requests. The industry is also witnessing transformative trends in technology, performance management, contract governance, and sustainability, adding to clients’ wish lists in the FM scope. However, the glaring issue is the outcome of these FM bids, which are mostly centered around commercials with little consideration of the technical competence in qualitative aspects of FM, as they are bound to have a particular additional cost, which I call ‘intrinsic cost’ for the required specifications.
For instance, if the housekeeping attendant’s costs are lower than the average wage standards, it is, therefore, bound to impact quality. The client and the teams assessing the FM bids should be mindful that stipulating additional technical conditions, such as bilingual housekeeping attendants, may have some cost impact. Therefore, it should be factored into the commercial assessment. They should know that reducing costs for certain technically required specifications will have its implications.
Thus, caution must be exercised not to lower the quality guard during negotiation. Both bidders and tenderers must tread a careful review of pricing as often during the best and final offer (BAFO) and last and final offer (LAFO) rounds; people lose track, where pricing overtakes all other merits. Unfortunately, this prevalent trend is growing, significantly impacting the FM standards and industry.
In the backdrop of this situation, the industry is at crossroads in maintaining high standards. This lacuna clearly shows that clients are keeping aside all the rhetoric of excellence in sustaining quality, opting for commercial over quality and sometimes even downscaling compliances. Most tenderers would not admit this, maintaining that they seek quality over price. However, this is rarely reflected in their price negotiations. In our own experience at EFS, in most tender negotiations, the pricing factor overruled all other merits. In almost two-third of the cases in the last 24 months, we saw how the BAFO and LAFO rounds have dismantled this myth.
I have persistently raised this issue for years, appealing to industry professionals and clients and dissuading them from such a commercial fixation. I continue to bring their attention to these practices, emphasizing their role in upending quality in FM standards by revisiting their sourcing strategy. However, not much is accomplished, as clients are overwhelmed by many other considerations, which, unfortunately, puts quality to wane. This impacts the FM industry in the long term, as it is struggling to improve standards and provide for necessary investments in infrastructure, upskilling, and meeting industries’ other transformation needs.
What can be done to address this?
There are a few crucial steps to address technical competence that tenderers must follow:
Pre-Bid Assessment
Nevertheless, the pre-bid assessment criteria for the bidders at the RFI (request for information) stage must be managed diligently to ensure quality FM bids. It must not be a formality; instead, it must follow industry best practices. In this experience, I ascertain bidders’ expertise and proven track record by seeking complete information. This includes evaluating bidders’ experience in managing facilities of comparable size, type, and complexity, as well as the qualifications and certifications of their staff. The pre-qualification should call for a well-documented history of successful project delivery and relevant industry knowledge, often critical factors in this assessment.
Ensure RFP Quality
After conducting the pre-assessment, the quality of the RFP (request for proposal) is a foremost need. Again, it must not be a copy and paste from a past tender or a consultant-driven document without a comprehensive review, ensuring that the merits of the tender requirements are well factored in and outlined in the document with proper timelines for site visits and submissions. Managing proper site visits with no rushed approaches, sufficient time should also be provided for seeking clarifications and responses. The technical competence of bids is a vital exercise where clients must apply high precision to ensure a high quality of FM service.
Post Bid Assessment
In facilities management tender submissions, the technical assessment criteria are crucial in evaluating the bidders’ capabilities and suitability for the project. The essential technical assessment criteria typically include the following:
- Proposed service delivery methodology and approach: This involves evaluating the bidder’s understanding of the project requirements and the proposed service delivery approach. It also includes their operational plan, resource allocation, quality assurance processes, and innovation in managing the facilities. The ability to demonstrate a clear, practical, and efficient methodology that aligns with the client’s needs is critical.
- Compliance and risk management: This criterion primarily examines the bidder’s commitment to compliance with relevant regulations, standards, and health and safety requirements under the RFP. It also assesses their risk management strategies, including identifying, mitigating, and managing potential risks associated with the management of facilities. Ensuring that the bidder has robust procedures in place for compliance and risk management is essential for the project’s success and the safety of all stakeholders. The assessment process must ensure minimum compliance standards on wages and benefits and the ability of bidders to administer them. It is required in the current context with an objective that this standard compliance will restrain companies against deviation. Second, ascertain if workforce deployment and other guided assumptions comply with RFP needs with quality technical assertions on staffing.
- Due consideration should be given to whether the bidder can demonstrate the proposed innovation and the value-added provisions that the RFP may entail. FM’s fundamental impact is to build asset longevity and commercial value; therefore, the submission must demonstrate that.
Commercial Considerations
The tender should specify the merits of commercial submission, which, by far, is the most important and must not be done independently. Still, it must ensure that technical aspects are duly factored in pricing. Especially in today’s context, commercials rule and eclipse all other considerations. Though its submission has to comply with RFP guidelines, the numbers finally speak. However, I strongly recommend that though commercial value is a vital part of the consideration, the technical credentials provided in the submission are crucial, with a stipulation of a minimum 50% to 60% weightage.
I believe technical competence must prevail over commercials. The assessment should ascertain that the bidder’s failure to meet minimum technical competence weightage would result in disqualification. In this context, I advocate for developing a precise bid assessment mechanism with due governance to avoid subjectivity in assessment and ensure merit in the evaluation methods. Therefore, clients seeking quality FM services must adhere to best practices and avoid rushed evaluations. Instead, they should follow a comprehensive bid evaluation process with due considerations, not just commercial ones, where FM standards and requisite goals will remain intact and not jeopardize quality.