Innovative Procurement and Partnerships in Facilities Management

Aim: The aim of the paper is to present, analyse and identify learning from two case studies of innovative procurement in Facilities Management (FM) concerning the establishments of partnerships between clients and providers. Approach and methodology: A major study of FM best practice covering 36 cases from the Nordic countries in Europe shows, that the most outstanding examples of innovation in FM are initiated from the demand side and involves new forms of procurement with long term contracts. This paper considers in-depth two differing examples of such innovative procurement approaches from Denmark. The first example is from a private pharmaceutical corporation, which has used so-called function based procurement in relation to office buildings. The second example is from a public organization, which has entered into so-called operational partnership with private providers concerning all municipal buildings and sports facilities in parts of the city of Copenhagen. Each of the case studies has involved both the client and the provider side of the collaboration. The paper presents, compare and analyze the two cases regarding intentions, procurement methods, forms of collaborations, performance measurements, and the results and experiences. Conclusions: The two cases show that an essential element in a successful procurement and partnership is that the client allows the providers freedom to plan their activities. Thereby the providers can optimize the use of their productive capacity and utilize their competences with incentives to profit from such improvements. A major challenge is to balance the risks between the client and provider and to create a common understanding about the quality level between representatives from both parties. For the providers this kind of collaboration set strong requirements on the management style and company culture. Limitations of the research: The research is only based on two case studies, which obviously limits the possibility to generalize the results. Practical applications: The research presents two specific examples of innovative procurement in FM which can give inspiration and learning to other public and private clients. The research also outlines requirements and recommendations for providers to be able to become successful collaboration partners in these kinds of partnerships.