Vendor Management for FM in residential buildings

All, Miscellaneous, Facility Management

Vendor management is a fundamental component of facilities management. While the majority of skills essential to manage a residence/building are available in-house with the FM team, there is still expertise that is required for additional services/operations that an FM Manager needs to outsource. Vendor management generally falls into two broad categories - traditional procurement which involves a defined scope of work, and partner/alliance that helps with flexibility, better and faster services for specific operations. Vendor management by definition means outsourcing of a task, process or operation for a specific period of time; it also includes contracting/hiring of machinery/products - these requirements vary depending upon the need of the hour for the residential property.

 

To segregate the categories, traditional contracts/procurement are more appropriate where the scope of work is adequately defined and the possibility of variation or failure is relatively low. A partnership/alliance is more helpful when the services necessary for the building operations are complicated and require innovative solutions. Let’s look at a guideline that needs be followed while selecting and working with a vendor for either category: -

 

Information –

Provide background information with respect to the context of the procurement and the processes to be executed through it. Share a case study if required, which will act as a reference and also as a parameter for the processes.

 

Scope of Procurement –

This is distributed into three verticals – Inclusions (To research on the requirement and provide a report for it), Exclusions (Only to procure machinery and not install them) and Optional (Extensions for which proposals are required). Get an understanding of key logistics and supply chain impacts as well here.

 

Costs and Budgets –

Provide an estimate of the procurement project cost which should include an estimate of the consequential cost and life span ROI of the machinery, operations, etc. Understand the planned budget provisions and its review mechanisms elaborately and plan it accordingly.

 

Stakeholders Expectations and Risks –

Understand the stakeholder’s requirements, analyze it and highlight the key concerns. Highlight the key risks as well, develop a risk and management plan and share it if required with the management beforehand. Take the guideline/checklist that you need to follow from the society while hiring the vendors and also working with them.

 

Product Selection –

Adopt a sustainable procurement approach here; this means a longer-term approach to measure costs and benefits which will help generate an overall value. For e.g. durable products require fewer replacements, they have inbuilt parts that are easily available. They also consume fewer resources, reduce waste and would cost less in their overall life span as compared to other expensive products that come with a specific timeline and warranty; green products are other very good substitutes here that help with the environment and the cost savings.

 

Database –

Integrate all the information about the vendor and the product requirements in a database -this would be similar to how you conduct your CRM (Client Relationship Management). This shall help you with multi-tasking in terms of different locations and also operations, for e.g. if a work order is generated in your HVAC system, you would know exactly whom to call and also if the asset is under warranty, its productivity, longevity, etc. to understand the expense required behind it.

 

Timelines associated with Vendor Deliverables –

While finalizing the vendors during the vendor selection process it is important to include turn around times, for the supply of their service/goods. This will help ensure smoother maintenance of the property as well as help mitigate several risks. During the vendor selection phase it is also helpful to define payment terms that may give the residents more leverage over the vendor, for e.g. part payments prior to delivery of the said services/goods.

 

Contract Strategies –

Check if you have opportunities where the suppliers where you are able to return the products at the end of its life. Examine leasing requirements for products that require maintenance, replacements, upgrades, and repair while in use. Also, ensure that the provisions mentioned below are included in the contract: -

Technical Specifications – Mandatory requirements and rules that need be followed by the vendors

Evaluation – Pre defined technical parameters to measure the services delivered

Management – Develop a Service Level Agreement (SLA) to supervise the work in process, and ensure the vendors are penalized if the SLA points are not met

A guideline from the tenants/residents, these are the mandatory practice that the facility manager will need to follow while working with a vendor: -

Has the vendor adhered to all the safety and environmental norms and compliances shared by the society; is an induction conducted for these before starting the work?

A work schedule as per the society’s sanctioned hours, the vendors should be allowed to work only during these hours; this is in order to maintain privacy and avoid disturbances

Details of vendor registration and identification through the display of professional permits or vendor sticker

Documentation of database of all the names, designations and responsibilities of all the vendors and their respective teams

Are the products procured water/energy efficient?

Does the product contain any chemicals that would reduce indoor air quality?

Are the instructions for operating, storing, installing and disposing of the materials/products given correctly?

Can the product be reused and recycled?

Safe work method statements which include assessments of safety risks, for e.g. electrical welding, working at heights, etc.

Recorded and files copies of insurance certificates