knowledge article

What Should an FM Contract Include?

An FM contract should make the service understandable: which sites and activities are covered, who is responsible, how work is instructed, what the client pays for and how results are reported. It also needs a clear process for changes and handover.

Discuss your requirements

An operating system for the estate.

Describe the scope precisely

List the sites, assets or service lines included. Identify operating hours, planned activities, retained suppliers and the information available at the start. Broad labels such as 'full maintenance' leave important questions unanswered unless the schedules explain the actual work.

Distinguish routine service charges from separately instructed repairs, parts, projects or other costs. Where an allowance or limit applies, explain how it is used and who authorises work beyond it.

Define responsibilities and authority

The appointment should identify the service provider and client contacts, spending authority, access responsibilities and the technical roles required for the work. A responsibility table is useful where the landlord, occupier, managing agent and suppliers all have different tasks.

Identify applicable duties and specialist appointments in the responsibility schedule, with the appropriate contractual advice.

Make service levels measurable

Separate acknowledgement, attendance, temporary measures and permanent resolution. Define the priority categories, start and end points for measurement, operating hours and escalation route.

Record how access problems, parts, missing information and client decisions affect the programme. A transparent explanation of those events makes performance easier to assess than a single clock with unexplained pauses.

Agree the information and reports

Specify the work-order information, completion records, asset updates and reports the client requires. Agree format, frequency, recipients and access arrangements. An attractive dashboard is not a substitute for ownership of the underlying records.

Also identify the source of the starting data. If the asset list is incomplete, the contract should explain the work needed to establish the baseline and how that affects the initial programme.

Set the commercial terms

Record the contract term, renewal arrangements and notice dates alongside the service start. Establish invoicing, payment and price-review arrangements, including how separately instructed work is charged. Make the route for raising and escalating a contractual disagreement clear to both parties.

Compare these terms alongside the scope: two proposals with the same annual figure can have different renewal commitments, exclusions and charging arrangements.

Plan changes and exit at the start

Sites, services and operating requirements change. The agreement needs a route for assessing the effect, authorising the change and recording the updated scope and price.

At handover, the client needs usable records, an explanation of open work and clarity over access and ongoing responsibilities. Define those outputs at mobilisation, while both parties can still plan for them.

Questions to ask when comparing proposals

More information

Are both providers pricing the same sites, assets, tasks and service hours?
What decisions and administration remain with the client?
Which costs are included and which require another instruction?
What evidence shows that work has been completed?
How are recurring defects and overdue actions reviewed?
What records are returned when the service ends?