IFMA FMPv3-0 F-B Ch3

Chapter 3: Procurement
in the Facility Organization
► Topic 1: Procurement Procedures
► Topic 2: Procurement and Facility

Management Outsourcing
© 2014 IFMA
All rights reserved Chapter 3 Introduction Edition 2014
www.ifma.org/fmp Slide 3-1 v3.0
Procurement
Procurement is the systematic process by which an
organization reaches formal agreements for the purchase
of the supply of goods and/or services. When dealing with
a supply chain, the process may be called supply
management. It:
► Is intended to maximize cost-effectiveness and to protect unwary
would-be purchasers.
► Is customarily achieved through open competition processes that
promote fair and equal treatment of all bidders.
► Differs from purchasing (which is the specific buying activity or the
placing of orders under the umbrella of a procured goods or service
contract).
© 2014 IFMA
All rights reserved Chapter 3, Topic 1 Edition 2014
Procurement Principles
► Conform with all applicable laws and regulations.
► Treat all prospective suppliers and their representatives fairly and
impartially.
► Achieve the best value for money on all procured goods and services.
► Reduce procurement process costs and ensure continuous improvement.
► Ensure that all procurement activity adheres to organizational policies
(such as sustainability, diversity, equality and workforce issues).
► Ensure that procurement is undertaken in accordance with high
professional standards and ethics.
► Ensure that procurement activity is organized in an effective, structured
way and is embedded in the organization.
► Develop management information and the use of performance measures
of procurement.
© 2014 IFMA
Sustainable Procurement Practices
Facility managers should seek to minimize
environmental damages associated with
their purchases by increasing the acquisition
of environmentally preferable products.
Environment + Price + Performance

 

Environmentally preferable purchasing
© 2014 IFMA
Discussion Question
Identify the following procurement practices as a request for
proposal (RFP), an invitation to tender (ITT), or a request
for quotation (RFQ).
Answers:
RFP 1. Suppliers are allowed to make their best efforts in their
response.
RFQ 2. Used when discussions with bidders are not required and
price is the main or only factor.
ITT 3. Typically includes a suite of formal documents and specific
instructions to suppliers for compiling and submitting
information.
RFP 4. Creativity and innovation in a supplier’s response may be
used to judge submissions.
ITT 5. Intended to help interested third parties produce a competitive
submission with information requested in the specified format.
© 2014 IFMA
FM Procurement Processes
Identify the Supply market
Solicit bids.
need. assessment.
Prepare the
Draft contract. Evaluate bids.
request.
Finalize the
request and Review the
Award contract.
submit it to request.
procurement.
© 2014 IFMA
Bid Award Selection Criteria
Lowest Responsive Evaluated/Best Unique

Bid Value for Money Bid Service
► Straightforward award. ► Based on evaluation of ► Provider with highest

► Based on the lowest technical criteria as well technical quality often
bidder who can meet as bid price. selected on technical
the specified ► Vendors are rated merit.
requirements. against a floor. ► Final contract price and
► Typically used for ► European public-sector terms negotiated after
reorders, routine and rules allow for a the selection.
well-defined user competitive negotiation,
requirements. with a very short list of
bidders.
© 2014 IFMA
Additional Procurement Considerations
Procurement should be carried out in compliance
with organizational policies and existing laws and
regulations.
► Monetary value may require the involvement of a formal
procurement review committee or team.
► Scope and scale may necessitate:
– Life-cycle costs.
– Best-value judgments of quality and costs.
– Risk assessment.
► Many additional actions (tips) for success.
© 2014 IFMA
FM and Outsourcing
Outsourcing generally describes the process of
contracting with another company or person to do a
particular function; it encompasses anything not done with
in-house labor. It:
► Is also known as contracting out.
► Can take many forms:
– Full-service, single-source vendor
– Out-tasking
– Management contracting
– Managing agent
– Principal contractor
– Total FM contractor
© 2014 IFMA
Exhibit Traditional In-House Delivery Model
3-3
Finance
Strategic Client Procurement
Audit
People management
Finance
On-Site Procurement
Tactical Client
FM Team Health and safety
Project management
Technical
Service Delivery
Operational
Supply Chain
© 2014 IFMA
Exhibit Hard and Soft Services Split
3-4
Client
Strategic
Soft Services Hard Services Finance
Manager Manager Procurement
Audit
People management
Finance
Site-Based Procurement
Tactical Site Based FM
FM Health and safety
Project management
Technical
Soft Services Hard Services

Delivery Delivery
Operational
Specialist Services Specialist Services
Supply Chain Supply Chain
© 2014 IFMA
Exhibit Managing Agent
3-5
Finance
Administration
People management
Finance
On-Site Off-Site Procurement
Tactical Client
FM Team Support Health and safety
Project management
Technical
Operational Supply Chain
© 2014 IFMA
Exhibit Principal Contractor
3-6
Client
Strategic Representative
People management
Finance
On-Site FM Off-Site Procurement
Tactical PC Director
Team Support Health and safety
Project management
Technical
Operational Supply Chain
© 2014 IFMA
Exhibit Self-Delivery Total FM Package
3-7
Finance
Audit
People management
Finance
On-Site On-Site Procurement
Tactical Client
FM Team Support Health and safety
Project management
Technical
Main Service Elements Delivery
Operational
Specialist/Minor Services Supply Chain
© 2014 IFMA
Why Outsource?
► Cost reduction opportunities
► Access to expertise not available in-house
► Improved resource flexibility
► Improved cost flexibility
► Improved career opportunities for FM staff
► Access to investments or systems that would require
capital that cannot be justified in the host organization
► Free up management time to focus on strategic issues
and planning
© 2014 IFMA
Discussion Question
Identify the following statements about outsourcing
advantages and disadvantages as true or false.
Answers:
False 1. Increases control
True 2. Can improve efficiency and effectiveness
False 3. Requires no learning curve for the outside
organization
True 4. May provide specialized FM services or best
practices
True 5. Can reduce operational expenses
© 2014 IFMA
Setting the Stage for Outsourcing
The facility manager needs to conduct due diligence.
 Definition of objectives and key attributes of services required
(description of current arrangement, identification of stakeholders).
 Adequate documentation.
 Identification of special demands (uniqueness) of the service
 Identification of high-priority services and risk assessment of these
areas
 Consideration of flexibility and variability in demands
 Consideration of management implications
 Appropriate bid evaluation criteria (soft and hard measures and
comparison of all costs, not just lowest price)
© 2014 IFMA
End of Chapter 3
© 2014 IFMA
All rights reserved Chapter 3 Edition 2014

IFMA FMPv3-0 F-B Ch3

Uploaded by

Copyright:

Available Formats

IFMA FMPv3-0 F-B Ch3

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

IFMA FMPv3-0 F-B Ch3

Uploaded by

Copyright:

Available Formats

Chapter 3: Procurement

in the Facility Organization

► Topic 1: Procurement Procedures

► Topic 2: Procurement and Facility

Environment + Price + Performance

Lowest Responsive Evaluated/Best Unique

► Straightforward award. ► Based on evaluation of ► Provider with highest

Soft Services Hard Services

Operational Supply Chain

Operational Supply Chain

Main Service Elements Delivery

Specialist/Minor Services Supply Chain

You might also like