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Targeted Service Agreements Offer a Range of Options
August 18, 2017 - Outsourcing
By Brian Seeger and Nick Baer
Facilities management service agreements offer customized solutions that help building owners and facilities professionals efficiently and cost-effectively cover all aspects of operations and maintenance. A service agreement can integrate as few or as many services needed.
Outsourcing agreements introduce options that may include:
• Comprehensive, customized total facilities management, which includes construction capabilities.
• Supplemental facilities staffing.
• Maintenance only for buildings where no daily facility management is necessary.
• Time and material on-call maintenance as needed.
Contracted facilities professionals — who often include an in-house property manager — can provide services from emergency repairs to keeping a routine maintenance and inspection schedule active and on time. They also can provide access to a variety of construction services as needed. Clients also may get deals on supplies and services because facilities management companies frequently negotiate bulk service agreements with partners-suppliers.
How It Helps
A building service agreement can help reduce and stabilize building operating costs by offering:
• Budgeting assistance for long-term building costs, including long-term capital replacement.
• Access to construction and other service professionals and supplies.
• Right-size scope of project work to ensure the right balance is met between adequate service levels and costs on budgeted maintenance and service items.
• Right-size staffing to keep personnel costs low, from complete staffing plans to supplemental support for in-house staff.
• Energy usage and expense analysis to determine additional savings on operating costs.
• Emergency response plan development to avoid business interruption costs and ensure safety precautions are top-of-mind.
What are the potential cost savings? Customers who use facilities service agreements report they have trimmed costs by as much as 19 percent.
Leading facilities service agreements provide building owners with customized coverage for facility management requirements. It’s not a “one size fits all” solution. Contracts are tailored to the needs of an individual facility following an on-site assessment.
In most cases, the outsourcing provider’s team visits a prospective customer for a facility operation and maintenance review. This complete evaluation examines everything from building inventory and staffing to operating and maintenance costs and budget to possible retro-commissioning of building systems.
Assessments, and the resulting conclusions, are as detailed as the information a customer is willing to share. The more details offered, the better the contracted professionals can create a made-to-order solution.
Total Facilities Management
One option is a full-service program. The in-house facilities team gets a 24/7 single point of contact and a dedicated property manager for all of its facilities management requirements. A comprehensive contract provides oversight on everything from HVAC, electrical, plumbing, building repair and construction service.
This has been critical to the small, in-house maintenance staff at Toledo, Ohio’s Fifth Third Field, home of the Toledo Mud Hens, for the last seven years. They enlisted the help of an outsourcing provider to get a more in-depth level of facilities management and maintenance support to help oversee the complex needs of the 200,000-square-foot ballpark and surrounding properties.
The Mud Hens signed up for a total facilities management contract that provides the Mud Hens’ management staff the ability to reach experts at a moment’s notice for routine issues, emergencies, and unplanned outages, as well as building improvements and renovations to enhance business operations on an ongoing basis.
The provider also conducted a complete cost analysis of energy usage and systems, determining that Fifth Third Field could benefit from using LED lighting instead of halogen. Over a period of three years, the combined facilities team retrofitted inefficient lighting.
The Mud Hens’ contract helped the organization reduce total annual operations and maintenance costs by 19 percent, including 30 percent in utilities savings.
Emergency Response Planning
Toledo-based Sun Federal Credit Union learned there’s more to a facilities service agreement than ongoing routine maintenance support. An outsourcing provider manages all subcontracted work and capital projects, and helps assemble annual and capital budgets for the financial cooperative and its 11 locations throughout northwest Ohio and the Philadelphia area. The provider also stepped in to help Sun Federal plan for building emergencies.
Buildings like credit unions typically aren’t occupied 24/7. This means disaster can strike when no one is around to take swift action. Accidents can cause damage to buildings or problems in systems that go unnoticed for days.
Planning for outages or having an emergency response in place and on call before a crisis happens can save companies thousands of dollars in overhead costs.
The new plan creates continuity across Sun Federal’s facilities. If something were to happen at a location, the plan provides immediate solutions to keep downtime minimal and put staff and customers at ease.
Other Contract Options
For some facilities teams, an assessment reveals they don’t require a full-service agreement. However, they may still benefit from a customized level of support.
Some property owners might opt for maintenance-only coverage with stable, fixed annual costs for targeted major systems, such as HVAC or roof repairs. Others might seek only supplemental maintenance services to assist an in-house team. Another possibility might be to request time and materials and receive only basic, on-call service and maintenance. The final option is to pursue support through quoted projects.
The facilities leadership at Inverness Country Club in Toledo selected a program that covers 68 mechanical units on the 200-acre property and gives management fixed maintenance costs to help better plan for budgets and minimize risk. It also has improved the club’s mechanical systems. And Inverness has the option to pay for the work over a five-year period.
“With our sustainable maintenance agreement, there are no surprises,” says Joe Furko, general manager and chief operating officer of Inverness Country Club. “It fits into our facilities maintenance and upgrade plan, particularly in light of our preparations to host the 2021 LPGA’s Solheim Cup competition." The agreement helped the organization's capital cash flow and made it possible to replace a 30-year-old chiller and cooling tower. Plus, the yearly energy savings helped reduce the cost of the maintenance agreement.
Brian Seeger is general manager of special accounts at Rudolph Libbe Inc. Nick Baer is GEM Energy’s service group general manager. Both companies are part of the Toledo, Ohio-based Rudolph Libbe Group.