The Bottom Line of Outsourced Facilities Services

• By Randy Ledbetter
• 10/01/09

In this unprecedented time, financial pressures force every college and university to search for ways to stretch resources without compromising the student experience. The challenge is to find ways to economize over the short term without jeopardizing the future. One area, facilities management, presents a number of seemingly Sisyphean choices. Decisions must be made about reducing services and/or deferring maintenance — all while protecting the long-term vitality of campus assets.
 
Many colleges are turning to continuous improvement approaches that manage costs while protecting and even improving facilities. These approaches, however, require an investment in facilities program expertise and resources that go beyond the in-house capabilities of most institutions. Even colleges with excellent facilities management staffs often turn to experts for specific services.
 
The Outsourcing Alternative for Facilities Management
Outsourcing is a way to supplement in-house staff; it is also a way to transfer facilities management and day-to-day responsibilities to a service provider that has the expertise to more effectively perform the tasks. Many college administrators consider outsourcing expensive because they see money leaving the institution when, in fact, outsourcing facilities management services can save money while delivering a better-looking campus for faculty, staff, and students. How is this possible?
 
It comes down to a question of what business you’re in and your area of expertise. Large outsource service providers have resources that are beyond the reach of virtually every educational institution. They are up-to-date (or should be) on the latest trends and technologies, such as reliability-centered maintenance and total cost of ownership, as well as industry benchmarks and best practices.
 
They also have the power to consolidate purchasing for their customers to deliver better prices on supplies and equipment. They have the training resources to ensure that custodial and maintenance employees are both efficient and follow safe work practices. In addition, they have the manpower resources to respond for special events or emergencies and have teams of specialized personnel — plumbers, electricians, HVAC technicians, landscaping architects — available for special projects that would not be economical for most schools to keep on staff. They have the technical infrastructure, such as national call centers to administer computerized maintenance management systems, and to schedule and dispatch work orders.
 
Additionally, they have the resources and expertise to help you prioritize and schedule maintenance and capital projects that address the most pressing issues while planning for the future. Prioritization and planning is especially important now, in order to gain the insights necessary to invest in projects that have immediate paybacks and/or minimize the need for future major capital projects. It’s important to anticipate future costs and timetables for roof maintenance, structural issues, energy projects, lighting upgrades, insulation, and other projects necessary to maintain or improve assets.
 
Daily Operations
The more traditional outsourced functions are centered on daily cleaning, maintenance, and landscaping tasks. Here again, because of their expertise and concentration on facilities services, outsource service providers generally offer more efficient services at a lower cost. They’re often able to do it with the college’s existing employees by giving them the management guidance, as well as technical and training tools.
 
Outsourcing is not an all or nothing proposition. There are several outsourcing models that may fit your organization.
 
Management Services. Some outsource service firms can structure relationships under which staff remain college or university employees. The outsource company oversees the cleaning, landscaping, and/or operations & maintenance (O&M) functions by providing a highly skilled manager who, working with college staff and supervisors, applies advanced technologies and implements the latest work practices. The employees are often able to take advantage of the vendor’s safety and product training programs, and the institution benefits from the consolidated purchasing power.
 
Custodial and Landscaping. This is the traditional outsourcing model for colleges. The service contractor offers its management services as described above and takes over the day-to-day operations. In most cases, staff moves over to the contractor, and employees are able to grow within the organization. A wider range of training is available to employees. The institution removes itself from direct management of day-to-day operations, purchasing supplies and equipment, and providing other administrative services. It also eliminates the HR, payroll, benefits, and others resources required to support the employees who move to the service provider.
 
Operations & Maintenance. These services cover the physical plant, facilities, and grounds, and include predictive maintenance for major systems. The full resources of the contractor are generally available, or specialized trades people are engaged if technical specialists or operational consulting is required. The contractor also manages subcontracts and warranty work on specialized systems, such as elevators, escalators, chillers, scoreboards, etc.
 
Integrated Facilities Services (IFS). This is a turnkey solution for colleges and universities that takes care of all facilities services functions and may or may not include the outsourcer guaranteeing the institution’s budget depending on the contractual arrangement. With IFS, colleges and universities are able to completely outsource facilities management. The outsourcer handles all of the technical aspects and works closely with the administration. In addition to providing day-to-day services, the outsource provider becomes an expert partner to your organization to help you implement your institution’s vision for today and the future. The service provider essentially becomes an adjunct department that reports to a facilities vice president, controller, or CFO.
 
Outsourcing facility management is both cost effective and efficient for colleges and universities. It takes advantage of the provider’s expertise, resources, and buying power, which enables institutions to concentrate on their core missions. It is often the most cost-effective approach not only today, but also for the future, by optimizing capital asset investments.
 
Randy Ledbetter is vice president of business development at UGL Unicco. He has more than 30 years of facilities maintenance experience, including 25 in the education market; has personally managed four large complex FM operations; and consulted with well over 100 educational institutions. He has published numerous articles relating to FM and is an active member of NACUBO, APPA, and AFE, and was the 2004 recipient of APPA’s prestigious Eagle Award. For additional information, e-mail [email protected] or visit www.ugl-unicco.com.