Innovative Procurement and Partnerships in Facilities Management: Two case studies from Denmark

A major study of facilities management 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. 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 partnerships with private providers concerning all municipal buildings and sports facilities in parts of a city. Each of the case studies has involved both the client and the provider side of the collaboration. The 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.