Facilities Management—contractual issues
Produced in partnership with Karen Clarke of CMS
Facilities Management—contractual issues

The following Construction guidance note Produced in partnership with Karen Clarke of CMS provides comprehensive and up to date legal information covering:

  • Facilities Management—contractual issues
  • Procurement issues
  • Parties, privity and third party interests
  • Duration
  • Governance
  • Contractor's key obligations
  • Client's key obligations
  • Change mechanisms
  • Payment
  • Insurances
  • more

When entering into an FM arrangement there are many contractual issues for the parties to consider ranging from how to best place the contract (procurement options and requirements) all the way through to what will happen if, in practice, the contract doesn't live up to expectations (change mechanisms, termination and dispute resolution).

This Practice Note summarises the key contractual issues to be addressed when putting together the formal contract document. Each of the issues requires careful consideration and tailoring to take into account any specific project requirements but it is essential that during negotiations the parties keep in mind the overall contractual matrix of risks and responsibilities (see diagram: What does a Facilities Management contract look like—diagram).

Procurement issues

Issues around the procurement of FM services can be split into two categories:

  1. how will the client go about procuring the FM contract relationship itself? What will be the process for tendering and entering into the contract? Does the client’s identity and status mean that additional procedural requirements will be placed upon it by European procurement law?

  2. how will the client go about procuring the actual services? What will the form of contract look like?

The key issue affecting both categories is the client’s status (this could be public sector or affiliated to the public sector) and the extent to which EU procurement

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