This document provides guidance on procuring facilities management (FM) services. It begins by defining FM procurement as "the process of acquiring goods, works and services from third parties and in-house providers." It then outlines the key steps in the procurement process, including developing a procurement strategy, issuing a tender, evaluating bids, and awarding and managing a contract. The document also discusses factors to consider when determining contract duration and the goals of the pre-qualification stage of reducing the bidder list to a manageable number that are capable of delivering the required services.

1. The Good Practice Guide to...
FM PROCUREMENT
good practice guide no.1
retail price £10

2. British Institute of Facilities Management
67 High Street, Saffron Walden
Essex CB10 1AA
Tel: 01799 508606
Fax: 01799 513237
Email: admin@bifm.org.uk
Web: www.bifm.org.uk

3. T
he objective of this guide is
to show how to obtain best
value in the procurement of
FM services in a professional and
compliant manner. This should
achieve efficient, economic and
effective procurement of FM
services, cost savings, and
standardised procurement
processes that support economic
growth and profitability.
It is aimed at all organisations
that procure FM services, within
both the private and public
sectors.
Procurement is an essential
function of FM. It is in the
interests of all purchasing
organisations that value for
money and professional
standards are achieved when
procuring FM goods and services
and that procedures are in place
to ensure high standards of
financial management and ethics.
Both HM Treasury and the
Office for Government
Commerce (OGC) produce
guidance on procurement
that highlights the need to
demonstrate a clear
understanding of the
procurement process to
establish optimum value and
standardised methodologies
based on best practices. These
are spelled out in a number of
‘Guidance’ publications. The
content of this guide is also
based on a review of these
publications.
Within the context of FM and
services, procurement can be
defined as: “the process of
acquiring goods, works and
services, covering both
acquisition from third parties
and from in-house providers.
“The process spans
the whole life cycle from
identification of needs, through
to the end of a services contract
or the end of the useful life of an
asset. It involves options
appraisal and the critical ‘make
or buy’ decision.”
Procuring FM services
This guide addresses the
principal considerations and
issues of most FM procurement
activities. It is worth noting
Welcome to the Good Practice
Guide to… FM Procurement
The Good Practice Guide to FM Procurement 1
Contents
1 Introduction
2 FM procurement principles
7 The procurement process
15 Tender documentation
20 Appendix A:
EU procurement rules
21 Appendix B:
Prequalification: suggested
format and inclusions
22 Appendix C: Template for
supplier-reference questionnaire
23 Appendix D: Template for
tender evaluation

4. however that there will be some
deviations and differing
requirements and processes,
particularly in the following
areas:
Public sector procurement
Public sector organisations have
to comply with the EU
Procurement Directives and
Regulations. All works and
services above a threshold value
will need to comply with these
requirements resulting in open
competition across the European
Union.
Within the context of this
guide, the main differences
concern the procedures for
engaging suppliers; opportunities
need to be publicly advertised
(via the Official Journal of the
EU), there are specified
procedures and timescales to be
adhered to. Brief information on
public sector procurement
thresholds is given in Appendix A.
PFI
The Private Finance Initiative is a
UK Government scheme to
reduce public sector borrowing
and to promote efficiency in
project finance and execution.
It is essentially a method of
procuring capital projects
(including FM services) over a
long term to enable enhanced
service delivery, but where the
capital expenditure in the
2 The Good Practice Guide to FM Procurement
present is converted to an
expenditure commitment in the
future. The FM services are
generally included in such deals
over a long-period (typically
25 years).
eProcurement
Also known as eSourcing,
eProcurement has grown
significantly in the UK in the
past couple of years and is
considered to be the major driver
for establishing further
efficiencies within the
procurement cycle.
It is fully endorsed by
government and involves the
electronic procurement of works
and services via a dedicated
portal over the internet. Within
the context of FM, eProcurement
focuses on achieving process
efficiencies and savings in the
following areas:
• Pre-qualification process
• Tender Process
• Contract management
eProcurement is not discussed in
detail here: it is the subject of
another guide in this series.
And don’t worry... even with
the differing requirements,
constraints and procedures
required to satisfy the above
categories, the principles and the
majority of the processes
outlined in this guide will still
apply.
Legal considerations
The procurement process refers
to the supply of goods or services
from one party to another. The
basis of the relationship and the
remedies available for non-
performance are defined by and
result from legal processes, and
virtually all aspects of
procurement are influenced by
law.
Within FM services
procurement, the legal
frameworks most frequently
encountered will be contract law
and other statutory law relating to
the supply of goods and services.
Within the public sector,
procurement is also influenced by
the European Union (EU) public
procurement directives.
In order to verify the existence
of a valid contract, the following
elements must exist:
• Intention – both parties must
intend to be bound by the
conditions of the contract
• Offer and acceptance –
FM procurement principles
DOs and DON’Ts
DO ensure that suppliers
are dealt with fairly and
impartially
DO consider the merits of the
various sourcing strategies for
your particular situation
DO ensure you follow a well
structured procurement
process

5. Within the context of FM,
procurement can be defined as:
“the process of acquiring goods,
works and services from third
parties and in-house providers”
agreement must be reached by
both parties. One party can
make an offer, the other
confirms acceptance
• Capacity – generally any
person can enter into a contract
• Consent – for the contract to
be binding, the consent to
contract must be free of fraud,
deceit, undue influence or
misinterpretation
• Performance – the
obligations must be capable of
being performed
• Legal – a contract can be
declared illegal if it requires one
or both parties to engage in
illegal activities
A number of laws regulate the
sale and supply of goods and
services. The key ones are:
Sale of Goods Act 1979:
covers the supplier liability
concerning description,
merchantable quality, and
fitness for purpose
Supply of Goods and Services
Act 1982: imposes a duty of
care and achievement of a
reasonable timescale on sellers
of services
Unfair Contract terms Act
1977: offers limited protection
against suppliers who seek to
avoid statutory obligations
Procurement ethics
Ethics in the context of
procurement concerns the
standards of conduct that
ensure individuals and
organisations are trusted
and respected by those with
whom they deal.
They are important because
poor relations with suppliers
can cause long-term harm to
the reputation and credibility of
purchasing organisations.
The general principles
governing the conduct of an
organisation’s employees would
normally be incorporated into
an employee handbook or other
similar document.
The guidelines on ethical
practices cover situations when
procurement personnel are
confronted with choices during
their work. These include:
• Bribery
• Gifts and hospitality
• Expenses
• Conflict of interests
• Confidentiality
• Samples, discounts and
personal purchases
• Contests, lotteries and draws
Purchasing organisations should
aim to deal fairly and impartially
with suppliers. Suppliers should
be given a fair deal and equal
opportunity to present their
products and services.
Sourcing strategies & FM options
A common theme within FM is
outsourcing. Beyond the single
service or small number of
packaged services, usually
managed by in-house
departments, there are
essentially three main types of
management service provision
in the marketplace, managing
agent, managing contractor and
total FM (sometimes referred to
today as integrated facilities
management).
Single Service Suppliers
Sometimes a purchasing
organisation’s business case
and procurement strategy
dictates that a single supplier
will be required as opposed to a
bundled or packaged FM
The Good Practice Guide to FM Procurement 3

6. Service e.g. for maintenance,
cleaning or security.
There are many reasons why
single service suppliers are
procured in preference to other
sourcing options, including:
• market expertise
• niche market
• in house capacity & expertise
• other services catered for (in
house or already outsourced)
• to satisfy specific
organisational needs
(strategic or operational)
• risk reduction
• provides greater operational
control
As the purchasing organisation’s
outsourcing policy matures
however, alternative sourcing
options may be required to
satisfy the business case, in
particular, where greater
economies and efficiencies may
be recognised.”
Managing agent (MA)
The managing agent model is
based on forming contractual
relationships directly between the
client organisation and individual
service supply organisations and
then appointing a management
company to monitor and manage
performance, delivery and
relationships.
By bringing in an external
organisation to manage the
facilities, the organisation is
essentially appointing a client
representative (or managing
agent). There are distinct
advantages in adopting this
arrangement. Both the managing
agent and the various service
providers can be selected on the
basis of competitive tendering as
formal contracts will exist
between both the managing
agent and the client organisation
and the individual, or packaged
service contractors and the
client organisation.
Managing contractor (MC)
Under this arrangement, one
contract exists between the client
organisation and the facilities
supplier. Sub-contractors to the
MC will be under contract directly
with the managing contractor and
so will not have a contractual
relationship with the client
organisation. This means that the
client organisation will have a
single point of contact with the
managing contractor on all
matters pertaining to the service
provision. One advantage of this
type of arrangement is that there
should be a sizeable reduction in
administrative duties required to
manage the contract.
Total FM provider (TFM)
The TFM organisation supplies a
fixed price for all support services
through directly employed staff or
by using outside suppliers.
Instead of service contracts being
provided in separate packages by
individual companies, the client
organisation would seek tenders
for the primary contract.
The TFM provider may offer a
single point of contact and
responsibility for the client
organisation with the benefit of
only one contract to manage.
The TFM provider must ensure
that no gaps exist in the
specifications and will require
skilled staff to manage the
contract. As with the managing
4 The Good Practice Guide to FM Procurement
MANAGEMENT CONTRACTOR
PACKAGED SERVICE SUPPLIER
SINGLE SERVICE SUPPLIER
TOTAL FACILITIES
MANAGEMENT PROVIDER
MANAGING
AGENT
DELIVERY MANAGEMENT
NUMBEROFSERVICES

7. contractor option, a clear
advantage with TFM is the
reduced administration input.
The opportunities for value-
for-money are reduced as
competitive tendering for the
various services for which the
client organisation receives
benefits is only provided once
(the TFM organisation will keep
discounts or benefits from sub-
contractors, unless agreement is
made to share profit on possible
savings).
The client organisation has
less control of the sub-
contractors. There is also major
upheaval when the contract
expires or is terminated.
Procurement strategy
The quality of services is
difficult to evaluate before it is
delivered. It is therefore
The Good Practice Guide to FM Procurement 5
Advantages of the Managing Agent Model Disadvantages of the Managing Agent Model
• Separate appointments with no interdependence
• Transfer of risk from the client organisation
• Introduction of specialist expertise
• Enhanced flexibility through individual tailoring
• Independent viewpoint, no conflict of interest
• Can work with a combination of in-house resources
and outsourced providers
• Possible gaps between work packages
• Greater reliance on capability of MA
• Some risk remains with the client organisation
• Client has no direct relationship with service
provider
• Possible loss of in-house expertise
Advantages of the TFM/Managing Contractor Model Disadvantages of the TFM/Managing Contractor Model
• Lower bid prices
• Minimal headcount
• Fixed price
• Risk transfer
• Single point of contact for the customer
• Clear delineation of responsibilities
• Reduced administration
• Major changes and effort required in educating and
starting up new Contracts periodically
• Inflexible, ‘all or nothing’
• Danger of getting standard offering
• Client organisation may require support in
administering the Contract
• Is totally dependent upon trust and a ‘partnering’
ethos to succeed.

8. essential to have in place
effective, well structured and
well managed procurement
systems which enable the
management and control of
the risks inherent in any
procurement decision
The procurement process is
as defined in the diagram
(below).
Development of the
procurement strategy will
involve the following steps:
6 The Good Practice Guide to FM Procurement
• Detailed market sounding/
market intelligence
• Determine the contract
strategy and procurement
route
• Identification & allocation
of risk
• Estimates for resources
and funding
• Outline business case
• Preparation of tender
documentation including
evaluation strategies/criteria
Supplier & Market
Intelligence
Define Business Need
and Project Objectives
New Service/Contract
Requirement
Review Performance
and Feedback
Administer and
Manage Contract
Award Contract
and Debrief
Evaluate and
Refine Tenders
Invite Tenders
Define tender list
Define the BriefDefine procurement
and contract strategy
PROCUREMENT
CYCLE

9. The procurement process
The Good Practice Guide to FM Procurement 7
Procurement programme
A typical procurement
programme is shown on the
next page. It highlights the
activities and approximate time
required to complete each task.
Procurement activities within
the public sector are governed
by the EU procurement
directives and rules which
specify the procedures to be
adhered to concerning the initial
pre-qualification process and
specifies specific times that
must be adhered to between
activities (these are referred to
in Appendix A).
With these additions
activities within public sector
procurement is otherwise
the same as the table on the
next page, which assumes
a traditional procurement
programme and not an e-
procurement process.
While this indicative
programme provides
approximate timings for each
activity, some activities may run
parallel with each other and
others will be on a critical path.
This should be identified and
agreed during the preparation of
the detailed programme.
Contract duration
A number of factors influence
the duration of any FM contract.
More often however, the
purchasing organisation pays
insufficient attention in deciding
the duration of a contract and
assumes the duration will be for
a minimum of three years and
maximum of five years.
The duration of the contract
period should be included
as a fundamental part of the
business case and procurement
strategy.
The purchasing organisation
should consider a number
of influencing factors before
deciding on the contract
duration.
Indicators for short-contract
duration
• Query performance standards
• Value-for-money concerns
• Changing technology
• Changing market (purchasing
organisation)
• Future sourcing trends
(supplier)
• Changing legislation &
apparent business risk
Indicators for longer contract
durations
• Procurement and transition
costs
• Optimising in-house
resources and expertise
• Investment
• Staff transfers/TUPE
• Internal customer relations
• Low perceived business risk
The above issues and other
factors should be considered
before determining the contract
duration. This ensures that the
contract duration is consistent
with both the short-term and
longer term business objectives.
It is also worth noting that it
is usually the strength of the
partnership, not the wording in
the contract which governs the
actual term of the contract.
Pre-qualification
The main purpose of the
pre-qualification stage is to
reduce the number of suppliers
to be invited to tender to a
manageable number. The object
being to produce a short-list
of suppliers, any one of which
could be entrusted with the
required services.
Referring to the table on the
next page, the initial step is to
gather market intelligence on
the suppliers that may deliver
the required services. This
will enable an organisation
to prepare the ‘long-list’ of
suppliers.
Market intelligence on
potentially suitable suppliers
DOs and DON’Ts
DO identify a realistic
programme duration for the
procurement process
DO give detailed consideration
to the appropriate duration of
the contract

10. 8 The Good Practice Guide to FM Procurement
Procurement Activity Time Notes
Pre-qualification Period
Establish the Procurement Project Team 1-2 weeks Will generally include:
Project sponsor
Project manager
Procurement professional
Technical professional
Stakeholder group
Re-visit/update the business case 1-2 weeks Complete checklist
Gather supplier market intelligence/Establish 1-2 weeks Based on known requirements, e.g. size,
volume, turnover, expertise, services offered.
Review suppliers’ websites
Contact potential suppliers to establish interest 1 week Initial contact by telephone or email
Prepare the RFI (pre-qualification) question-
naire and criteria for evaluation
1-2 weeks Include input from the project team
Issue and receive the completed RFI 2 weeks Generally by email
Evaluate RFI responses against pre-defined
criteria & prepare a ‘short-list’ of companies.
Prepare report
Tender Period
1-2 weeks Include the project team as appropriate
Prepare tender documentation 3-4 weeks This will generally include several draft versions
circulated for comments within the project team
Invite Tenders/Issue tender documentation to
short-list
4-6 weeks Supplier presentations/site visits & management
of queries during this period.
Receive & evaluate tenders 3-4 weeks This period will include:
Commercial/financial/technical reviews
Clarification/substantiation
Seek references
Supplier presentations
Post tender negotiations
Prepare Tender Evaluation report 2 weeks Should be well structured and cover the entire
procurement process
Arrive at a decision to proceed 1 week Project sponsor
Appoint preferred supplier via ‘letter of intent’ 4-6 weeks This period will include:
Further post tender negotiations
Agreement of Terms & Conditions
TUPE transfers (if appropriate)
Prepare & sign Contract Agreement Document 2 weeks Includes tender documentation, questions &
answers during the tender period, supplier’s
proposal document & all post tender documents
Mobilisation & setting-up activities 4 weeks Transfer responsibility to operational team
Contract commencement

11. may be obtained via the
trade and accredited bodies
that represent the particular
industry in which they operate.
The relevant trade bodies
usually publish details of their
membership, including other
key information and details
which will shorten the process.
The pre-qualification criteria
should be developed and
agreed before suppliers are
invited to participate. The pre-
qualification criteria will be used
to evaluate supplier responses
and should generally include a
scoring system, with weighting
as appropriate, to evaluate
the following aspects of each
response:
• General company details (not
scored)
• Financial information (min.
requirements to be met)
• Business activities
• References (quality of)
• Insurance details (min.
requirements to be met)
• Service specific requirements
• Quality, health and safety
• Human resources
• Professional and business
standing
Within the above, there will
be certain ‘show stoppers’,
eg financial and insurance
data, that will need to satisfy
minimum criteria before a
The Good Practice Guide to FM Procurement 9
providing each tenderer with a
reasonable chance of success.
The precise number of suppliers
on the short-list should be
based on the individual merits
of the respective requirement
including size, scope and value.
Typically, between four and six
companies should be invited to
tender.
The tendering process
The tender information should
be as comprehensive as
possible in order to receive
quality bids and to reduce the
number of queries during the
tender period.
It must be clear which
elements are contractual and
which parts are for information
or guidance to assist the
supplier in understanding the
requirement and transferring
this knowledge to their bid
proposals.
The Tender documents
will form the basis of the
supplier’s price. Lack of
clarity or ambiguity in the
tender documents will create
weaknesses or opportunities
which the supplier may exploit
in order to increase costs at
a later stage and/or delay the
delivery programme.
It is important therefore that
the tender documents satisfy
the following key elements:
• The documents should be
Supplier may be considered
further. In some instances,
suitable forms of evidence will
also be required at this stage
of the process, eg, company-
registration certificate, audited
accounts and copies of other
relevant certification.
A framework matrix for the
pre-qualification questionnaire
is included in Appendix B for
reference purposes.
The pre-qualification
questionnaire (PQQ) should
be evaluated consistently and
objectively according to the pre-
defined model.
Buyers will carry out their
evaluation of submitted bidder
prequalifications questionaires
and supplier reference
questionnaires (Appendix C)
and exclude those bidders who
do not meet the minimum
requirements of suitability to do
business with.
Following the evaluation
process a short-list of suitable
suppliers will be defined
and the buyer should inform
the unsuccessful suppliers
and provide substantiating
information as appropriate from
the evaluation matrix.
There are no specific
rules that suggest how many
suppliers should be included on
the short-list but a reasonable
balance must be struck between
encouraging competition and

12. 10 The Good Practice Guide to FM Procurement
specific about what is required
• The documents should be
clear and unambiguous; these
and any other documents e.g.
post tender negotiations that are
subsequently incorporated as
contract documents, should be
consistent with one another
• The conditions must clearly
allocate risks between the
supplier and purchaser and
specify who must pay what in
the event of variations or delays.
The content of tender
documentation will generally
include:
• The request for proposal
(tender instructions)
• Draft agreement (including
general conditions of contract or
reference to a specific form of
contract)
• Abstract of particulars
• Standard forms as appropriate
(eg tender & tender price form,
parent company guarantee etc.)
• Additional contract conditions
(if using a standard form of
contract and/or for specific
conditions which are excluded
from the general conditions of
contract, eg detailed health &
safety conditions)
• Scope of the services/
specification
• Pricing schedules
• Performance measurement
system (incorporating the KPI’s)
• Asset registers (for
maintenance contracts)
• Schedules and drawings
• Administration procedures
• Property schedules (if multi-
property portfolio)
• Minimum or acceptable
maintenance/service standards
• Legislative compliance
checklists
• Miscellaneous reference
documents (e.g. facts and
figures, organisational details,
details of current/historical
services etc.)
In addition to stating specific
requirements within the
tender documents it is always
worthwhile providing additional
background information in
the form of appendices to
enable the supplier to establish
proposals which will promote
best value principles and
innovation.
Tender evaluation
Sufficient time should be
allowed for the assessment of
returned tenders to ensure that
the most appropriate supplier
is selected for the required
services. The following policy
considerations should apply:
• The purpose of the evaluation
process is to identify the best
value-for-money supplier by
comparing the price against the
assessed benefits
• Parity of tendering should be
observed
• The evaluation process should
be in accordance with pre-
defined criteria
The following procedures should
be adhered to within the tender
evaluation process:
Reference
Site Visits
Supplier Presentations & Post
Tender Negotiations
Commercial & High-Level
Financial Checks
Receive & Record Tenders
Establish Tender Board
Tender Report &
Recommendation
Financial
Evaluation
Technical
Evaluation

13. The tender evaluation board
should comprise; the individual
responsible for managing the
tender process, an end-user of
the service and a representative
from the finance/procurement
function.
The tender evaluation should
be carried out in a logical
sequence, usually comprising
the following stages:
• Commercial evaluation
(including client references)
• Financial evaluation
• Technical evaluation
(including site reference visits)
• Supplier presentations with
clarifications and substantiation
• Post-tender negotiations
• Tender evaluation report,
including recommendations
The tender evaluation procedure
should be consistent in its
application, relevant to the
scope and scale of the project
and fair to all tenderers.
The purpose of evaluation
is to compare the commercial,
technical and financial terms of
the offers received. Comparing
these aspects individually will
allow an assessment of overall
value for money.
Typical evaluation criteria are
shown below and it is usually
good practice to include a
high-level version of this in the
tender documents to enable the
suppliers to respond accurately
to requirements and focus in
the right areas.
It is usual practice to apply a
rating system to the evaluation
process where proposals can
be evaluated against the criteria
stated below.
Commercial evaluation
• Compliance with tender
documents
• Agreement of terms and
conditions
• Qualifications or omissions
• Compliance with the delivery
or implementation schedule
• Acceptance of payment
arrangements
• Ownership rights
• Sufficiency of insurance
• Experience & capability
• References received
• All necessary information
received
• Price validity period
Financial evaluation
• Accuracy of pricing
• Fixed-price evaluation
• Variable price evaluation
• Application of equalisation
factors
• Life-cycle costing projections
(& quantifiable benefits)
• Cost of components, spare
parts, consumables etc.
• Mobilisation & on-going costs
• Resource allocation/total
employment costs
• Financial qualifications (e.g.
review of published accounts)
• Quantifiable benefits arising
from the Technical evaluation
Technical evaluation
• Contract mobilisation
• Account management/contact
administration
• On-site management
• Operational resources
• Off-site support
• Quality of total service offering
(fit for purpose)
• Professional competence
• Operational standards
• Performance and productivity
standards
• Processes and procedures
(communications & reporting
standards)
• Method statements
• KPI’s
• Flexibility
• Customer satisfaction
• Continuous improvement/
innovation
• HR & training
• Reference site visits
• Sample documentation
Supplier presentations
The opportunity for suppliers
to present their proposals is an
integral and important part of
the evaluation process.
It offers the opportunity
for the suppliers to provide
an oral summary of their
proposal and enables the
purchasing organisation to
The Good Practice Guide to FM Procurement 11

14. experience at first hand each
supplier’s physical presence.
Presentations enable the
purchasing organisation to gain
valuable information about
the suppliers which would not
otherwise be apparent in the
tender response.
While supplier presentations
are held after the tender
response has been received
they may occur at any stage
of the evaluation process and
are subject to the individual
project and organisational
requirements.
Sometimes all tendering
organisations are invited to
present their proposals and
at other times a reduced
number of suppliers are invited,
following an initial sifting
exercise.
Either way, the presentations
contribute significantly to the
decision making process and
should be planned accordingly.
The purchasing organisation
should establish the format for
the presentations in advance
and will usually invite all short-
listed companies to attend over
a two or three day period.
A pre-defined scoring sheet
should be developed and
applied consistently to each
supplier to reflect the objectives
of the exercise and circulated
to the stakeholder group within
the purchasing organisation
beforehand. It is also
recommended that the majority
of the project team attends
these presentations.
The format of the
presentations should be
distributed to the supplier
beforehand to enable
the supplier to tailor his
presentation accordingly.
During the presentations,
members of the review team
will complete the score
sheets and these will be
collected by the presentation
chairperson at the end of each
presentation. The respective
scores will then be added to
the overall evaluation matrix as
appropriate.
A typical agenda for the
supplier presentation is:
a) Chairperson welcomes the
supplier’s representatives and
introduces the evaluation panel
b) Chairperson outlines
purpose, structure and timings
of the presentation
c) Supplier’s presentation
(approx. 20 minutes)
d) Questions by the evaluation
panel (approx. 20 minutes)
e) Supplier questions/
clarifications
f) Chairperson to close
Post-tender negotiations
These should only be carried
out after the evaluation process
and following the decision to
appoint ‘preferred bidder’.
Negotiations should not
take place before this stage
as it would otherwise place
other tendering suppliers at a
disadvantage and may distort
fair competition.
The purpose is to obtain an
improvement in content and
circumstances with the ultimate
objective of establishing an
optimum level of service at
best value to the purchasing
organisation.
All negotiations should be
recorded to provide an audit
trail details of which will be
included within the evaluation
report and contract agreement.
Tender evaluation report
The evaluation process is
captured and formalised in
the Tender Evaluation Report
(Appendix D) which should
cover each stage of the
evaluation process culminating
in a recommendation to
12 The Good Practice Guide to FM Procurement
DOs and DON’Ts
DO carry out a market survey
of potentially suitable supplies
for prequalification
DO agree the prequalification
criteria before suppliers are
invited to express interest
DO ensure that the
prequalification questionnaire
asks questions relevant to the
prequalification criteria

15. appoint the tendering supplier
which offers best overall value
for money. The detail to be
included in the report is relative
to the size and complexity of
the project. It is usual practice
to issue a ‘letter of intent’
to award the contract to the
preferred supplier.
The supplier will need to
mobilise his operation and
engage in various ‘setting up’
activities directly after being
appointed preferred bidder
or following post tender
negotiations. Such activities
will generate a cost which
will be at risk to the supplier
unless certain assurances are
received from the purchasing
organisation. In an ideal world
the contract agreement should
be signed by both parties at
this stage. However, this does
not usually happen overnight
because other incomplete
tasks (agreement of terms and
conditions, TUPE implications,
finalising KPIs etc.) prevent a
quick resolution to the contact
signing.
The ‘letter of intent’ is
therefore an interim measure
which provides guaranteed
payment to the supplier (for
a limited time), states the
purchasing organisation’s
intention and provides certain
‘limited’ assurances to the
supplier that he may now
commence the mobilisation
process with limited risk and
exposure.
Following the final agreement
of the terms and conditions and
any TUPE and/or other issues,
the contract document may be
prepared, signed by both parties
and exchanged.
The contract document
establishes the legal formation
between the purchasing
organisation and the supplier
for the duration of the contract
period.
It will contain all necessary
information and documentation
from the tender issue to
appointment of preferred
supplier, usually comprising:
• Tender documentation
• Questions and answers
during the tender period
• Changes or enhancements
to the tender documentation
during the tender period
• The supplier’s response and
priced proposals
• Post tender clarifications and
substantiations as requested by
the purchaser and provided by
the supplier
• All documents relating to any
post tender negotiations
Declining tenders
It is advisable to notify the
successful supplier of the
intention to accept their offer
before sending out letters to
the unsuccessful suppliers.
Following confirmation from
the successful supplier,
‘decline letters’ should be sent
immediately to all unsuccessful
suppliers.
The letter of decline should
state the principal reason for
not being successful on this
occasion and thank them for all
of their hard work and efforts
as they would have expended
much time, effort and costs
during the tendering process.
Debriefing
Purchasing organisations should
also offer a debriefing meeting
to unsuccessful suppliers for
two reasons:
• It gives suppliers confidence
in the process
• It serves as a useful exchange
of information to both purchaser
and supplier which helps to
encourage market performance
As well as forming good
procurement practice, the
debriefing process is an
important learning tool for both
purchasing organisation and
suppliers.
For suppliers, it assists them
to identify where they went
wrong and to improve their
competitive performance which
means that they would stand
a better chance of winning
future business. The purchasing
The Good Practice Guide to FM Procurement 13

16. organisation will benefit from
gaining more information from
the marketplace.
The high-level goal of
continuous improvement
requires that we should all
take time to reflect on the
procurement process and
to identify how it may be
improved in future.
While time constraints
and other pressures suggest
that this offers little value to
the purchasing organisation
it should be viewed as an
opportunity to draw lessons
from the preceding stage and
provide positive feedback and
constructive criticism, as in
the long term this will help to
improve the overall process.
Effective debriefing requires
time and effort but this is
generally outweighed by the
potential benefits to both parties
as highlighted below.
Benefits to the purchasing
organisation
- Identifies ways of improving
the process in the future
- Suggests ways of improving
communications
- Makes sure best practice and
guidance is updated to reflect
any relevant issues that may
have been highlighted
- Encourages better bids from
those companies in future
- Helps establish a reputation
as a fair, open and ethical buyer
with whom suppliers will want
to do business
Benefits to the supplier
- May help companies rethink
their approach so that future
bids are more successful
- Provides direction and
guidance as to areas that they
need to address
- Can provide reassurance
about the process and their
contribution or role (if not the
actual result)
- Will provide valuable feedback
for future reference
Mobilisation & operational period
Following the tender process
and the appointment of the
supplier, the mobilisation
and operational periods will
commence.
It is at this stage when the
transfer of knowledge between
the procurement project team
to the operational management
takes place. This is an
important period and should
ensure that the supplier delivers
against his promises and
contractual obligations.
The fist six months of any
FM contract is critical in
determining the potential for
long-term success.
The purchasing organisation
should not under-estimate the
input required on their behalf
as any shortfall could cause
a disruption to the healthy
relationship developed during
post-tender negotiations.
The content of the
specification will generally
require the supplier to develop
his processes and systems,
including reports, IT, invoicing
procedures, KPIs etc. during
this period and the purchaser
needs to ensure sufficient
resources, both to manage
and accept the mobilisation
activities and to manage the
contract and relationship
thereafter.
14 The Good Practice Guide to FM Procurement
DOs and DON’Ts
DO give suppliers an
opportunity to present their
proposals
DO distribute the proposed
format of presentations to
suppliers beforehand
DO advise potential suppliers
if they are unsuccessful at
the prequalification stage,
and why
DO be specific in the tender
documentation about which
elements will be contractual
and which are for information
DO make clear how risks will
be allocated between supplier
and purchaser and what any
resultant payments will be
DON’T carry out post-tender
negotiations until the preferred
bidder has been appointed

17. Request for proposal (RFP)
Otherwise referred to as ‘tender
instructions’ or ‘invitation
to tender’, the RFP will not
usually form part of the
contract documentation since
its purpose is to provide an
introduction and guidance to
suppliers in assisting them to
submit a compliant bid.
The RFP provides an
overview of the requirement
to suppliers and serves as
a ‘road map’ for the tender
documentation.
It contains a complete list
of tender documents, specific
instructions that the supplier
needs to adhere to in order
to meet its obligations for a
compliant bid and states the
information required to be
returned by the supplier within
his proposals and the pro forma
for the response.
It is good practice to include
a format for response so that
all bids are returned in a logical
order which enables ease of
evaluation between suppliers. It
is also good practice to refer to
all documentation that is to be
returned with the tender here as
opposed to the specification.
Typical contents for an RFP
include:
• Introduction
• A complete schedule of
tender documents including
Annexes and Appendices as
appropriate
• Tender objectives and strategy
• Procedure for dealing with
tenders including alternative
bids
• General instructions
• Overview of the organisation
• Description of the services
requirement (scope of services)
• Description of the site(s)
• Procurement programme key
dates
• References and reference site
visits
• Acceptance of tenders
• Supplier selection criteria
• Information to be submitted
with the tender
• Arrangements for site visits
• Format for tender responses
• Local supplier’s policy
• Joint ventures
• No payment for tenderers
• Confidentiality of tenders
• Enquiries concerning tenders
The information contained
in the tender documents
submitted by potential suppliers
is confidential and should
not be disclosed to other
tenderers or made public. If it
is necessary to make a material
alteration to the specification
or the tendering process,
the purchaser must circulate
the same information to all
recipients of the RFP.
Contract conditions
The conditions of contract will
set the legal framework for
the Agreement between the
purchasing organisation and
the supplier. It is therefore
essential that the conditions of
contract cater adequately for the
services to be delivered under
the agreement and are fair and
reasonable to both parties.
It is usual practice to either
issue the contract conditions
with the tender documents
or state the applicable form
of contract within the tender
and include any specific detail
or deviations to the form of
contract within the abstract of
particulars.
By doing this, anomalies,
discrepancies or conflicting
information may be raised by
the supplier during the tender
period and resolved with the
purchasing organisation prior
to signing the agreement. If in
doubt the contract conditions
should be checked by a
property contract lawyer before
they are issued.
Wherever possible, it is
recommended that industry
standard contracts (Forms of
Contract) are used to formalise
legal relationships between
the purchasing organisation
and the supplier. In the private
sector, it is usual practice for
the purchasing organisation to
The Good Practice Guide to FM Procurement 15
Tender documentation

18. prepare and issue their own
standard contract conditions,
in the public sector however
the industry standard contracts
are usually used. These may of
course also be used by private
sector organisations but may
need some amendment as
appropriate.
Standard forms of contract
may also be supplemented by
the purchasing organisation’s
own specific requirements but
great care is needed to ensure
that there are no conflicting
requirements between the
different documents.
Standard forms of contract
may be obtained from a number
of sources, including:
1) OGC – Model Terms &
Conditions for Services (2005)
2) GC/Works/10 (2000)
Facilities Management Contract
3) CIOB – Facilities
Management Contract (1999)
4) CIPS – Facilities
Management Model Agreement
for Service Contracts
It is important to ensure that
16 The Good Practice Guide to FM Procurement
Tender document pricing schedules
Pricing Notes Provides the supplier with guidance on completing the pricing schedules & definition of
terms as appropriate
Fixed Costs
Tender Summary The first page of the pricing schedules to which all costs are carried forward.
Resource Costs Will include for all personnel/labour associated with the service including: weekly
hours, unit rates for each grade, holidays, training, sickness, NI, pension & insurance
costs (Total Cost of Employment)
Off-site
Management Costs
Account Management, Health & Safety, Auditing specialists etc. (if not included in the
overhead costs)
Specialist
Sub-Contractors
Required to supplement the suppliers in-house resources
Mobilisation &
On-going costs
All costs associated with the mobilisation and implementation of the contract e.g.
support desk & IT infrastructure, tools, uniforms etc.
Materials,
Consumables & Spares
Costs associated with materials e.g. toiletries, laundry, filters, bulbs, cleaning equip-
ment etc.
Provisional Sums For services that may or may not be included in the requirement. Provisional sums may
be excluded from the Tender Sum
Variable Costs (not carried forward to the Tender Sum)
Call-out rates For each response time as stated in the Specification
Day work Rates For non-lump sum works and services that may be required from time to time e.g.
reactive works and small projects
Percentage On-Costs For materials ordered via the contract and for works and services (non-lump sum)
undertaken/provided by specialist sub-contractors (usually quoted as a percentage)

19. The Good Practice Guide to FM Procurement 17
recent Legislation and Acts are
included within the Contract
or supplemented as described
above, whichever Contract is
used.
Pricing schedules
The pricing schedules are
usually annexed to the draft
contract included within the
Tender and structured to reflect
the specification requirements.
The specification needs to
be clear and unambiguous
in this respect in order that
the suppliers may respond
accordingly.
The pricing summary will be
carried forward to the Tender
Form & Tender Sum which will
usually be for the duration of
the contract.
As the duration for FM
service contracts is usually
for several years the Contract
Conditions will contain an
updating percentage for each
subsequent year beyond year
1.
In addition to the
requirement for the pricing
structure and format to fully
reflect the specification it needs
to provide sufficient cost data
to enable ease of adjudication
and be sufficiently flexible to
enable future changes within
the purchasing organisation’s
business or properties.
Guidance on the preparation
and content of pricing
schedules suitable for FM
services is included in the table
opposite.
A typical Tender Summary sheet is as follows:
Item Year 1
£
Year 2
£
Year 3
£
Contract Management
Set-up & Mobilisation
FM Services (Lump Sums)
Staffing Costs
Specialist Sub-contractors
Materials & Consumables
Provisional Sums
Overhead
Profit
TOTAL
DOs and DON’Ts
DO provide a format for the
tender response
DO use industry standard
contracts wherever possible
DO allow adequate resources
to support the new supplier
during the early stages of the
contract
DO specify your needs
sufficiently to ensure that they
are met
DON’T overspecify and so
discourage supplier innovation

20. 18 The Good Practice Guide to FM Procurement
Specification
A specification can be defined
as ‘a statement of needs to be
satisfied by the procurement
of external resources’. It is also
referred to as an operational
requirement, statement of
requirement, statement of
service and scope of services.
Its purpose is to present
prospective suppliers with
a clear, accurate and full
description of the organisation’s
needs, and to enable them
to propose a solution to meet
those needs. A specification
should be sufficiently detailed
so that the service meets the
user’s needs, but not so explicit
that it prevents negotiation or
discourages the supplier from
using innovative solutions that
offer better value for money.
The success of any
procurement exercise relies
on the specification being
an accurate statement of the
buyer’s requirements.
A good specification should:
• State the requirement clearly,
concisely and unambiguously
• Contain sufficient information
for potential suppliers to decide
the level of quality of services
they will offer
• Permit offered services to
be evaluated against defined
criteria
• Provide equal opportunities
for all potential suppliers to offer
a service which satisfies the
needs of the user and which
may incorporate alternative
technical solutions
• Comply with any legal
obligations
• Not over-specify requirements
• Not contain features that
directly or indirectly discriminate
in favour of, or against, any
supplier.
Framework for a specification
A framework for the preparation
of a specification includes.
Introduction:
- An introduction to the
customer organisation
- An introduction to the
specification
- Disclaimers, caveats etc.
Scope:
- What’s included
- What’s excluded
- What’s optional
Background to the requirement
- An overview of the business
of the organisation, including
outline of the business strategy
- An overview of business
objectives relative to the
procurement
- The objectives of the
procurement
- History relevant to the
procurement – recent
developments
- Business function and
processes
- Organisation and staffing
- Stakeholders
- Current service support
- Quantitative aspects of current
operations
- Future developments relevant
to the procurement
- Policies, standards
Detailed requirements
While the scope provides an
overview or summary of the
requirements, the main section
describes the requirement in
detail. Based on the information
provided in this section, the
supplier will base his proposals
and price on this section.
This section should also offer
the opportunity for the supplier
to offer alternative solutions.
Do not simply describe the
characteristics of an existing
service, but define the user’s
actual needs.
Performance requirements
Over the past few years it has
become common practice
to specify the performance
required of the solution by
setting out details of the outputs
to be achieved. The supplier
will, within his proposals,
identify and detail the inputs
proposed to meet the desired
outputs. These are commonly
referred to as Key Performance
Indicators (KPIs).
Example performance
measures are:
• Throughput – the volume
of inputs that can be handled
within a specified time
• Accuracy – the number of
outputs that are error free (%)
• Availability – the time the
solution is able to be used as
a percentage of the time it is
supposed to be able to be used.
Sometimes the achievement
of performance requirements
by the supplier is linked to the
supplier’s payment on a risk/
reward basis (typically 3%-5%
of the supplier’s annual lump
sum is related directly to KPIs).

21. The Good Practice Guide to FM Procurement 19
It is therefore important that the
performance requirements to be
specified adhere to the following
principles:
• Derived from strategy and
relate to specific goals
• Simple to understand
• Provide timely and accurate
feedback
• Based on quantities that can
be influenced, or controlled
• Reflect the business
processes
• Be relevant
• Clearly defined and
measurable
• Focus on improvement
The performance metrics
for each FM service may be
derived from the following
aspects:
• Compliance
• Cost
• Quality
• Quantity
• Timeliness
Other requirements include
security, standards & training
Implementation Requirements
Mobilisation & setting up
requirements
Contract/Service Management
Requirements
e.g. Management Information,
Communication, Reporting
Standards, Change
Management
Other tender documents
In addition to the RFP, Contact
Conditions, Specification and
Pricing Schedules there will
10 tips for preparing a specification
Use simple language & avoid jargon. Define terms, symbols and
acronyms
Use a logical structure
Be as concise as possible, avoid ambiguity
Avoid repetition
Arrange the components of the requirement into a logical form, matching
the evaluation model
Use a clear and attractive format, avoid over-fussy layouts
Number each section and paragraph using a logical and consistent
numbering sequence
Make sure that the contents list and any summaries are consistent
with the main body of text
Discuss the requirement with relevant stakeholders to ensure that the
specification caters for your entire needs
Ask someone else to read over and check the specification before
publishing it
usually be other documents
annexed to or appended to
the tender documents. The
type, volume and extent of
this additional data will vary
according to the FM service,
the quality of the procurement
team and the attention and
detail to these documents in
prompting a compliant bid
based on achieving best value.
The identification and
inclusion of supporting tender
documentation will produce
several benefits if presented in
the right way.
Some of these benefits include;
• Providing optimum detail
to reflect the buyer’s precise
requirements thus reducing the
potential risk of escalating costs
at a later stage.
• Projecting the buyer in a
professional way
• Identification and effective
management/transfer of risk
• Reducing the potential
for misunderstanding of
requirements
• Enabling the supplier to offer
innovative solutions
Typical documents that may
be included within the tender
package include:
• Supplementary Conditions
• Performance Measurement/
Management System
• Detailed asset registers (for
maintenance contracts)
• Drawings
• Detailed property information
• Other data that may be
relevant to the procurement
and/or services

22. 20 The Good Practice Guide to FM Procurement
Thresholds – Public Sector from 1st January 2004
Supplies Services Works
Entitles listed in Schedule 1
(S.I. 1995/201)
£99,695 £99,695 £3834,411
Other public sector
contracting authorities
£153, 376 £153, 376 £3834,411
Indicative Notices £485,481 £485,481 £3834,411
Small Lots Not applicable £51,785 £647,308
OJEU Advertising Timescales
Open Procedure Restricted Procedure Negotiated Procedure
Send Contract Notice to OJ Min. 52 days Min. 37 days Min. 37 days
Receive Expressions of Interest
Issue Tender Invites Select Tenderers
Receive Tenders Tender Period
Award Contract Max. 48 days Max. 48 days Max. 48 days
Appendix A – EU Procurement Thresholds and Timescales

23. The Good Practice Guide to FM Procurement 21
Section Typical Questions Evidence
1.0 General Company
Information
Head office/Regional Locations?
Contact details?
Number of Employees?
Type of Organisation?
VAT Registration?
Company Registration
Certificate
VAT Certificate
2.0 Financial Details Turnover (for 3 year period)?
Statement of Accounts for 3 years?
Value of Works as a % of turnover?
Cashflow and Credit position?
Financial ratios?
Audited Accounts
3.0 Business Activities Business activities of the organisation?
Specialist Services?
Staff numbers (Management &
Operational)?
Structures/Organograms?
4.0 References (Quality of) Organisation?
Contact Details?
Details of services provided?
5.0 Insurance Details Products and Public Liability?
Employers Liability?
Professional Indemnity?
Copy of valid policy
details
Copy of valid policy
details
Copy of valid policy
details
6.0 Specific Requirements Similar Services provided on behalf of
other organisations?
Similar services provided in a similar
market sector?
TUPE Experience?
Membership of Trade Bodies/Accredita-
tion?
etc.
7.0 Quality, Health & Safety Environmental Policy/EMS?
Quality Policy/System?
Health & Safety Policy/System?
ISO 14001 Certificate
ISO 9001/2 Certificate
OHSAS 18001 Certificate
8.0 Human Resources HR Policy Statement?
Staff Turnover rate?
Average length of service?
Training spend?
9.0 Professional and Busi-
ness Standing
Bankruptcy/Insolvency?
Criminal Offences/Misconduct?
Payment of tax obligations?
10.0 Declaration Signed Declaration
Appendix B – prequalification questionnaire: suggested format

24. Diagram 13 in here 3
pages...
22 The Good Practice Guide to FM Procurement
Supplier Reference Questionnaire (Private and confidential)
Supplier
We are currently evaluating Tender proposals received from the above names supplier for the provision of
facilities services to our organisation. The supplier has provided your organisation as a key reference and we
would therefore be grateful if you would
How long has this Supplier delivered facilities services to your organisation? years
Nature of Work Undertaken?
Type and Value of Contract?
Please enter ‘1’ as appropriate in the boxes below
Very Good Good Average Poor Very Poor
Contract Mobilisation
Contractual Compliance
Overall Account Management
On-site Management
Off-site Support Management
Operational Staff
Communications
Reporting Standards
Invoicing & Financial Management
Contract Administration
Support Desk (if provided)
Understanding of your business
Customer Satisfaction
Achievement of KPI’s
Value for money
Honesty/Integrity
Continuous Improvement/Innovation
Would you invite this Supplier to Tender again for similar work? yes/no
Any other comments?
Name Organisation
Date Contact details
Appendix C – template for supplier reference questionnaire

25. The Good Practice Guide to FM Procurement 23
TENDER EVALUATION FORM
Contract Title: Date:
Tenderer: Prepared by:
Criteria Weight
Factor
A (1-10)
Mark
B (0-10)
Score
A x B
Comments
COMMERCIAL
Tender Compliance
Terms & Conditions
Qualifications/Ommissions
Programme Complaince
Ownership Rights
Insurance Policies
Experience & Capability
All information received
Price Validity Period
FINANCIAL EVALUATION
Accuracy of Pricing
Fixed Price Evaluation
Variable Price Evaluation
Equialisation Factors
Cost Projections
Mobilisation/On-going costs
Total Employement Costs
Financial Qualifications
Quantifiable Benefits
TECHNICAL EVALUATION
Contract Mobilisation
Account Management
On-Site Management
Operational Resouces
Off-site Support
Fit for Purpose
Professional Competence
Operational Standards
Performance & Productivity
Processes & Procedures
Technology
Method Statements
Adherence to KPI’s
Flexibility
Customer Satisfaction
Improvement/Innovation
HR & Training
Reference Site Visits
Sample Documentation
TOTAL
Appendix D – template for tender evaluation

26. 24 The Good Practice Guide to FM Procurement
Notes

27. The Good Practice Guide to
FM Procurement
British Institute of Facilities Management
67 High Street, Saffron Walden
Essex CB10 1AA
Tel: 01799 508606
Fax: 01799 513237
Email: psc@bifm.org.uk
Web: www.bifm.org.uk
Publications sub-committee
Chair: Dr Bob Anderson BIFM(Qual)
Members: Stephen Bennett, Richard Byatt, Graham Briscoe and Cathy Hayward
Author: Richard Davies MBIFM, account director, Acuity Management Solutions
www.acuity.uk.net
Reviewer: John Bowen MBIFM, chairman, BIFM Procurement Special Interest Group
Series editor: Dr Bob Anderson BIFM(Qual), chairman, BIFM Publications sub-committee
Redactive Publishing Limited
17 Britton Street, London EC1M 5TP
020 7880 6200
Editorial
Tel: 020 7880 6223
Email: editorial@fm-world.co.uk
Editor: Cathy Hayward; Production editor: Gareth Price; Sub-editor: Steve Smethurst;
Art editor: Robin Farley; Picture researchers: Claire Handley and Sam Kesteven
Advertising
Tel: 020 7880 6209
Email: sales@fm-world.co.uk
Sales director: Justyn Gidley
Production
Production manager: Jane Easterman
Publishing
Group publishing director: Mark Payne
© The British Institute of Facilities Management (BIFM) series of Good Practice Guides is published on behalf of the
BIFM by Redactive Publishing Ltd (RPL), 17 Britton St, London EC1M 5TP. The guides do not necessarily reflect the views
of BIFM nor should such opinions be relied upon as statements of fact. All rights reserved. This publication may not be
reproduced, transmitted or stored in any print or electronic format, including but not limited to any online service, any
database or any part of the internet, or in any other format in whole or in part in any media whatsoever, without the prior
written permission of the publisher. While all due care is taken in writing and producing this Good Practice Guide, neither
BIFM nor RPL accept any liability for the accuracy of the contents or any opinions expressed herein.
Printed by Able Spice.