Client is key during FM bidding process

Stephen Maylin, senior facilities manager at TDIC, discusses the role and aspirations of the client during the FM bidding process

Maylin: “If the service provider is a serious bidder, then he must invest his own time, resources and professionalism in tender analysis.”
Maylin: “If the service provider is a serious bidder, then he must invest his own time, resources and professionalism in tender analysis.”

Everyone agrees that it is in everyone’s interest to work towards enhancing the client/supplier relationship and furthering the objectives of the FM industry. However, assumptions, miscommunication and lack of understanding are just a few things that can and do go wrong during the tender process, resulting in wasted time and resources for all parties.

I recognise that not all clients know and understand what they want and have difficulty in articulating their needs, but this is where the expertise of the service provider is needed. In this regard, it is imperative that service providers understand and take into account what challenges the client faces and what is expected from service providers during the tender process. As all parties will appreciate, a flawed tendering process leads to failed contracts which are detrimental to the industry.

When the client decides to procure FM services from an external FM service provider, it is usually considered that it will be a relatively simple process and to some degree, challenge free. The client undertakes several internal processes over many months, agrees a robust tendering strategy and producesa contract to go to the market with.

The contract that is tendered normally consists a scope of services (SOS); drawings; a Bill of Quantities; an asset register; a fee schedule; a set of Key Performance Indicators and the terms and conditions (T&Cs) of the contract. Although the T&Cs and the SOS are just two parts ofthe documentation that forms the entire contract, they are the most important and seemingly, the most contentious and confusing to service providers.

Why is this? The SOS specifies which FM services the client requires and the T&Cs state how the contract will be governed and managed. What could be easier? The SOS is normally prepared with care and professionalism in order to avoid any ambiguity and potential conflict and the T&Cs are usually a standard document prepared by solicitors for the client. Why then do the same problems reoccur during the tendering process?

Having analysed many tender returns from service providers over many years, I believe that the issues can be attributed to two principal areas – failure by the service providersto read and fully understand the SOS and their reticence to accept the client’s T&C’s in their entirety.

From a client perspective, sometimes the latter is non-negotiable. The T&C’s would have been produced by the client’s procurement department with the objective to protect the client organisation against business risk and then agreed and approved at board level. It is then extremely difficult, if not impossible, to change the client’s T&C’s. Of course, the situation is discussed and explained to service providers during the bidding process and rarely challenged at this point and therefore the client believes that there is no issue going forward.

However, often, when the client receives the completed tender returns from the bidders, it is disappointing to see that some of the bids are subject to acceptance by the client to the service provider’s T&Cs. From a client governance and process compliance point of view, bids received in this manner should be discarded and returned to the service provider as a non-compliant bid. However, for the sake of partnership development, the service provider is given the opportunity to withdraw his T&Cs in favour of the client’s.

Ninety nine times out of a hundred, the service provider complies and accepts the client’s T&Cs but occasionally, one will not and wishes to negotiate. This normally results in the end of their tender bid. Rather than wait until the bidding process is completed, which can be up to six weeks, I think it would be reasonable to expect the service provider to declare at the beginning of the process that their T&C’s must take precedent. This would then save all parties wasted time and resources by agreeing to end their participation at the outset.

The SOS is a menu of services that the client wishes the service provider to deliver. The SOS can be either an outputor an input type. An output type is where the services are specified at high level and the quality of the service is defined. An input type is where the services are specified and the delivery of the services is detailed in terms of manpower required, the trades required and how to undertake the various tasks. There are benefits and disadvantages to both types.

Irrespective of whichever type is tendered, a common frustration to clients during the bidding period is the amount of irrelevant questions that are asked by service providers and clarifications that are requested despite being clearly statedin the SOS. Where this is not so, no client will object to answering and clarifying points that are ambiguous or not covered in the SOS and indeed, will help to improve the final version of the SOS.

However, many clients receive questions and clarifications that arise from the lack of analysis and reading of the SOS by the service provider. It appears to the client that the serviceprovider wants the client to advise them where to look in the SOS for the answers to clarifications in order to save them time and effort. Unfortunately, clients do not have the time or resources available to provide this service and it is unnecessary and time wasting.

If the service provider is a serious bidder, then he must invest his own time, resources and professionalism in tender analysis. Additionally, clients respect and want to work with service providers who take the time to read and understand the SOS. This bodes well for future working relationships because it is good for the service provider, good for the client and good for the FM industry.

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