What is the risk?
In the present economic circumstance and with pressurised budgets, ensuring that maintenance costs are clearly understood, fully reflective of the actual works carried out, remain competitive over the life of the contract and that the works themselves are carried out to the required quality, is of paramount importance to any organisation with extensive property related assets.
The following risks are just a selection of issues which contribute to excessive cost:
- Abnormal tender procedures and unusual tender patterns with greatly inflated/clustered costs
- Day work irregularities / excessive hours and outturn costs
- Incorrect use of schedules of rates, duplications or incorrect measurements
- Poor or inadequate specifications, workmanship or choice of materials
- Works not carried out according to time deadlines.
What are the issues?
Too often, the checking of maintenance costs and the actual works carried out, is given insufficient importance and if undertaken, monitoring is frequently too superficial.
The following are some of the methods seen:-
- Comparison of annual costs with the previous year/s, to ensure that any increase reflects inflation; this is a useful check but not unless the origin of the cost is known to be accurate and to represent VFM
- Use of competitive tenders/quotations; however the risk of patronage, collusion or irregularity increases unless there is effective checking of procurement actions, results and patterns
- Comparison of actual costs against pre-estimates; on the one hand, a client pre-estimate is vital in establishing a benchmark against which offers can be compared, however, periodic cost checking of the accuracy of estimates should be undertaken, as `unnatural/repeated closeness` of tender and estimate is an indicator of possible collusion
- Reliance on competitively procured hourly rates or schedule of rates for pricing of maintenance work; however, there are numerous ways in which term contract accounts can be inflated.
How we can help:
We can provide peace of mind and improved working practice through:
- Audits of maintenance/new works (building and mechanical electrical) with respect to quality workmanship, timelines and cost
- Detailed checking of measurements and pricing by specialist staff
- Constructive reporting of findings and recommendations for enhanced procedures
- Cost checking (correctness/appropriate of cost)
- Detailed site inspections
- Full procurement appraisal options and planning.