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0 Contract Maintenance Models Trends and Options Presented by: Walter Rafin DTZ

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1 Presentation Roadmap Facilities Management versus Facilities Maintenance Maintenance Contract Model Options Summary

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2 Facilities Management versus Facilities Maintenance Facilities Management Facilities Maintenance versus Facilities Management integrates all organisational processes, people and workplace. Includes property | space management, infrastructure, support services, administration and asset management Facilities Maintenance sustains building and asset performance to design intent, to increase reliability, reduce equipment degradation, and sustain energy efficiency, whilst maintaining mandatory compliance requirements.

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3 Preventative Maintenance Usually fixed PM fee Normally includes some corrective elements (e.g. coil cleaning) Not usually inclusive of repair or reactive works Asset owner takes on almost all risk Results in too little or too much maintenance unclear requirements Budgeting & cost control difficult Too Little Too much

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4 Inspection (or Reactive) Based Fly-by inspections Usually fixed inspection fee Excludes any corrective elements (e.g. cleaning filters) Reporting of issues only Not inclusive of repair or reactive works Usually least expensive option Least effective Least effective?

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5 End Results (or Reliability) Not yet widely used All or part risk transfer Risk based on defined end result requirement (e.g. comfort) Payment based on results Usually tied to Guaranteed Maximum Price (GMP) Difficult to define parameters END

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6 Comprehensive Fixed Fee all inclusive budget certainty Full risk transfer to contractor Usually subject to condition assessment and latent conditions Excludes capital replacement, refurbishment and/or rehabilitation Contractor manages risk via rigorous PM or not enough PM RISK Labour Parts Significant administration savings

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7 Semi-Comprehensive Inclusive of all labour only Normally excludes parts and materials Fixed labour fee 2 nd most expensive model Works best for large sites or portfolios Budgeting can be difficult Less risk transferred to contractor Labour only

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8 Repair Work Limit (RWL) Research shows for M.E.F services: 66% $1000 & chargeable Most reactive calls minor Capped risk at predetermined/agreed threshold or RWL Usually subject to condition assessment and latent conditions Significant administration savings Labour Parts Materials Repair Work Limit

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9 Summary Choose wisely and do your homework Consider: - Economic conditions and what you can afford - Technical advances - Your portfolio condition - Your risk profile - Contract flexibility for change - Performance management and reporting framework Keep the end result in mind