In January 2021, NEC published a pack of new facilities management (FM) contracts, comprising four distinct contracts, six user guides and two flow charts. See our previous insights in relation to those contracts here.

A year on from the publication of NEC's suite of FM contracts – and in the wake of the COVID-19 pandemic - John Welch, Deputy Director of Crown Commercial Service (CCS) for Construction and NEC Users' Group chair, has set out his predictions on the future of the FM market[1].

Key observations include:

  • The drafting of FM contract provisions must be strategic and characterised by flexibility. This will allow for issues stemming from the impact of COVID-19 – such as skills shortages, legislative interventions and hybrid working regimes - to be managed appropriately and without undue disruption for buyers and suppliers alike;
  • FM market actors are tending to favour longer-term contracts, citing greater innovation, increased value for suppliers and continuity of service as the key advantages; 
  • Similar to other industries, FM market attitudes are shifting away from having a pure cost reduction focus, opting instead to favour sustainability and social value considerations. For instance, the FM market is anticipated to create more employment opportunities both within the locus of traditionally underrepresented communities and for the individual members of those communities;
  • Risk profiles in FM contracts are expected to evolve on a more equitable basis. For example, suppliers may be afforded the opportunity to increase contract prices to take account of external market developments, such as the national living wage; and
  • Finally, the financial standing of suppliers has been – and continues to be – subject to increased scrutiny within the marketplace and this has contributed to the evolving nature of risk allocation in FM contracts.
Ultimately, the FM sector is gearing up for a more flexible, adaptive and sustainable future. Should you require advice on future-proofing FM contracts or entering into this evolving market, please do not hesitate to get in touch with Stuart Murray, Partner at Brodies LLP.

[1] What the future holds for procurement in the FM sector | News | NEC Contracts


Hayley Burns

Trainee Solicitor