I do know that a few of our well known construction folk moved into this work a few years ago. It was at the time when we had a whopping recession. I think they found they were rather good at it. It brought a little bacon home; it kept a few managing directors busy keeping loos clean and emptying wheelie bins. At least, that’s what I thought FM was. In fact, it is more.
Anyway, now we have a standard form. It is published jointly by the Chartered Institute of Building and solicitor Cameron McKenna. I thought that, having built the building and moved in, FM meant being the maintenance man. It is, but it can also go as far as managing the occupants’ operation. The standard form lists 32 facilities to be provided or managed.
Of course, building maintenance is on the menu, but I had no idea that the in-house restaurant was a likely candidate – not just for managing but for actually providing the whole shooting match.
And the form explains what is meant by “services” in terms of management. It is to look after all contracts for the provision of services, undertake all clerical and accountancy functions, arrange the purchase of materials and supplies, interface with sub-tenants to facilitate moves in or out, monitor insurances, provide monthly reports, provide operating and occupancy budget estimates, provide emergency call-outs, and more.
The document explains the period for which the management applies, the annual fee and the yearly percentage increase in the fee. It plugs into the Construction Act, which requires interim payment provisions, and decides that the manager will be paid his fee monthly at one-twelfth of the annual fee plus whatever other reimbursable expenses and facilities costs fall due and payable.
If the cleaning isn’t tickety-boo, the manager collects five penalties … if a prisoner escapes, collect 100
It looks as though the annual fee is for all costs and expenses incurred and risks assumed by the manager in performing its obligations. So, if the duties include all cleaning, it’s up to the facilities manager to estimate how much Harpic is needed to go round the bend. The client is at liberty to order changes to the services, and these would operate like variations on a building contract. You can see why construction people would be comfortable with clients’ whims and fancies – for a fee, of course.
The manager is expressly required to carry out its task with reasonable skill and care and in accordance with the specification. It pays subcontractors, and is at risk if they fail to perform properly. It takes on health and safety, and performs the role of “planning supervisor” and “principal contractor”, as defined in the Construction (Design and Management) Regulations.
Woe betide the facilities manager that puts a foot wrong. The client is expressly entitled to abate the fees otherwise due if the manager fails to achieve the performance standards described in the specification. There is a sort of sin bin. It works on a penalty points system. If the cleaning isn’t tickety-boo, the manager collects five penalties; if the waste bin isn’t cleared on time, collect 10; if the gazpacho is too warm, collect 15; if a prisoner escapes, collect 100.
The FM contract has escape routes for both parties. Just give three months’ notice either side or earlier if either party has been very naughty under the contract. And, talking of disputes, the document brings in adjudication in a very simple way. It simply says: “The Scheme for Construction Contracts” applies and the adjudicator shall be appointed by the CIOB. The place for any final decision if not agreed is in arbitration. And, since I have learned that FM can mean services quite outside construction, it is tolerably clear that the Construction Act’s payment provisions and adjudication are not obligatory. But the authors of the new form have brought in the provisions by way of contract, which makes complete good sense.
Tony Bingham is a barrister and arbitrator specialising in construction.