How To Hold Your Facilities Maintenance Contractors Accountable Part Two

This article is divided up into two posts. This first post is about how to set up the right mindset for your company, your team, and your contractors. You can find that here.

This post is about creating a system for managing expectations and developing strong relationships.

On this blog, we share actionable advice and give away free tools for fro Facilities Maintenance Professionals. Be sure to subscribe so you don’t miss anything.

The three things every facilities manager wants.

Back when I managed a large self-performing maintenance company, I used to ask my customers, “What are your biggest frustrations with your current set of contractors?” or, “What can we do to become your favorite maintenance contractor?”

Their answers could always be boiled down to three main frustrations. First, they wanted better communication. Facilities managers hate sending a job to a contractor and then not finding out what was done until they received an invoice weeks (and sometimes months) later. They wanted to be kept in the loop every step of the way.

Second, they wanted follow through. The contracting industry has a reputation of not showing up, being late, and being non-commital. Maintenance management professionals are accountable to their leadership and they need to work with maintenance contractors who show up on time, complete work quickly, and stand behind their repairs.

Last, and it’s always last, is fair pricing. Facilities managers understand that hourly rates and markup have less to do with the cost of doing business with a contractor than do completion time, turnaround time, and quality of repairs. They are not looking for the cheapest price. They are looking for contractors who get the job done, charge a fair price, and don’t needlessly nickel-and-dime them to drive up an invoice.

These top three things every maintenance manager wants are not exhaustive, but they are the most important. From my experience in the industry, when these three things are managed and measured well, maintenance contractors perform well on other items too.

This is a principle that we believe in and teach. In order to make something better, decide on the top three most important things and create systems which focus on those things.

Vetting new maintenance contractors.

Since the three most important attributes of a great maintenance contractor are communication, follow through, and fair pricing, create a new contractor interview process designed to uncover whether or not a contracting company has these attributes. This can be done over the phone on a call that is about 45 minutes long. Your job on this call is to ask questions and listen. I always say it’s hard to learn when your mouth is moving.

Start the call by thanking them for their time and asking them to tell you about their company. Remember, let them talk. Avoid telling them what you want or talking about your company. You are listening for evidence that they put processes in place to deliver on the three things you need from your contractors.

Next, ask them to explain their process for managing a repair from beginning to end. Is it well thought out? Do they state what and when they communication updates. A red flag here is if they tell you they customize that they do for each customer. This sounds nice, but it’s difficult and problematic to operate with different processes. Of course, there may be things they will do specifically for you. There still needs to be a foundational set of processes they follow.

Ask them about who you will be working with on a regular basis and for them to explain that individuals role. You are are listening for evidence that there are clearly defined roles and that the individual as freedom to make decisions without having to consult their superior every time. It’s impossible to provide excellent customer service while being limited from making decisions. I find that when an organization does not trust their front-line people to make decisions, there is something wrong with they way they treat people, or something wrong with the person they are putting in the role.

Ask them about how they incorporate technology at their company? How do they automate repetitive tasks? Are they willing to interact with your software in order to provide a higher level of service and convenience to you? Is there someone responsible to learning and training their team on technology? This area is important because as your company grows, you are going to implement software to make your job easier. You will need to partner with contractors who are able to keep up.

Finally, ask for references. You absolutely must follow up with references. You will get more quality information about what it’s like to work with a company from other customers. Ask about what this prospective contractor does well and what they do poorly. Especially ask about times when they messed up. How did they respond? If everything checks out, send the contractor your company’s vendor on-boarding documents.

Create vendor on-boarding documents.

You absolutely must have vendor on-boarding documents. At a minimum they need to included:

  • A service agreement
  • An expectations agreement
  • A contractor information page

Your service agreement needs to be created by your companies legal counsel. It should be simple and outline the following along with any other terms which are important to your company.

  • The contractor relationship between you and your contractor
  • The fact that each work order is viewed as an independent contract for services performed
  • Payment terms
  • Insurance requirements
  • How conflicts will be handled
  • Points of contact for legal correspondence
  • Service rates along with an expiration time so rates can be adjusted if necessary

Your expectations agreement should outline just that: what you expect from your contractors. If it is in this document, you should also have a system for measuring and reporting on compliance. This will be important during routine reviews which we will cover later.

  • Communication guidelines: when, what, and to whom
  • Repair turnaround timelines
  • Invoice turnaround timelines
  • Required information for invoices
  • Warranty expectations
  • Work order workflow expectations
  • Software compliance expectations

The contractor information sheet is used for your team to reference when they need to discuss something with the contractor and will include the following.

  • Main point of contact with title, email, and direct phone
  • After hours point of contact with title, email, and direct phone
  • Escalation schedule (who to call next if you can’t get a hold of someone) with name, title, email, and direct phone

    Have a kick off call

Once you get all of the paperwork back, schedule a kick off call with everyone who will be working together on repairs. This call should take about 45 minutes. You will use this time to walk through a work order from beginning to end allowing each party to stop and explain what needs to be performed or communicated at each step. Take extra care to understand the roles and responsibilities of the contractor’s representatives. Take notes. Ask questions. Make sure everyone understands the answers to questions.

At the end of this call, everyone will have clarity around what a successful business relationship will look like. If everything goes well, and you are ready, give the contractor a trial for 3 months to see what it’s like to work with them.

Use not-to-exceeds (NTE’s).

If you are unfamiliar with this term, please go read our post on using NTE’s and then come back to this page.

In the early days of a new vendor relationship, set the NTE lower than you would normally set it. This will create more points of communication during a work order process and will give you opportunity to address questions and clarify expectations. Once you are comfortable, increase the NTE back to a normal range.

It is incredibly important that you hold your vendors accountable to obtaining NTE increases prior to performing work. Do not get into the habit of approving after the fact price increases. NTE’s are your most effective means of cost control. Be fair, but hold a firm stand. There will be situations where it will be unavoidable to approve pricing ahead of performing the work, however, these are extremely rare occasions.

Have regular review meetings.

At the beginning of each year, schedule one review meeting per quarter. Do this in advance, prioritize it. One week ahead of the meeting, pull reports on how the contractor is performing compared to the expectations. There should be one report per item on your vendor expectations agreement.

Start the meeting by asking your contractor for honest feedback on how things are going. Ask where they feel they are performing well as well as poorly. Ask them what they feel your company could be doing better.

Next go through each item and the report. Restate the expectation and how they are performing against the standard. For areas where they are performing poorly, ask them what challenges they are facing which keep them from being able to deliver according to standard. For easier where they are performing well, ask them what they are doing to perform so well.

Keep an open mind. If you see trends between your contractors performance, especially in areas where they are not performing well, and the reason are similar, the problem may be on your end. Revisit the expectation and determine a better way to solve the problem, or consider whether the expectation is necessary to begin with.

Distribute work orders fairly.

If you have a particular contractor who performs well, meet with them and send them more work. It will make your job easier. Explain to them why they are receiving more work and reiterate that they should keep that up. It will also make them more successful which in turn will make them more likely to prioritize your company. Take extra care to pay attention to service levels after you assign more work to make sure they remain the same.

If a contractor is not performing well, meet with them and reduce their work load. Explain to them where they need to improve and what will happen if they either improve or do not. Important! Unless there is gross negligence, dishonesty, or some other unethical offense, do not fire a vendor for a slip in performance. Always give them an opportunity to improve.

Growing from management to leadership.

I will end this post with one final word of advice. I heard Horst Schulze, co-founder of the Ritz-Carlton, say that he looks for people with vision, who can tell him where they want to go and what they want to accomplish. He said that people with vision are leaders. They see the world differently than managers who want to maintain the status quo. Managers ultimately fall behind while leaders pass them.

Your role is has to evolve from management to leadership. If you want to be able to have great success, you have to learn to lead.This requires you to look at your job from a completely new perspective. Every decision and action you take must be intentionally working towards a defined goal.

The reason so many facilities managers have problems “holding vendors accountable” is because they have problems holding themselves accountable to improving the way they run their departments or perform their jobs.

Start defining what you want, design a plan that gets you there, and then work the plan.

If like what you just read and want to hear more, sign up to receive new posts and article like this delivered straight to your email. You can either keep doing things the way you always have, or learn so you can make things better. It’s your choice.