Facilities Management Middle East
“Current FM contracts favours the client”
TAREK NIZAMEDDIN, SENIOR EXECUTIVE DIRECTOR AT EJADAH, REVEALS ISSUES RELATED TO FM CONTRACTS AT THE FACILITIES MANAGEMENT MIDDLE EAST CONFERENCE 2021
Tarek Nizameddin, senior executive director at Ejadah spoke about some of the unresolved issues in FM contract process, especially the lack of FM-specific templates for contracts.
At the Facilities Management Middle East Conference 2021 held on 29 September at the V Hotel in Dubai, Nizameddin, who was the keynote speaker, set the tone for the event that discussed FM contracts, worker welfare and training.
Nizameddin said: “Only a few clients develop their own FM contracts. Clients are still depending on construction templates that includes parameters not really relevant to our industry, such as liquidated damage, warranties, etc. Why am I requested to provide 12 month warranty on cleaning contracts?”
The major issue is that such contracts heavily favour the clients and are nonnegotiable, added Nizameddin. He elaborates: “We are told to take it or leave it [when it comes to contracts]; either accept it or you are disqualified, which is not fair. And to add insult to injury, those contracts are favouring clients. We know what it takes to deliver the service that our client requires. But unfortunately clients are not willing to listen. The contract is drafted by their legal team and in most of cases the legal terms are not even reviewed by the client’s operations team.”
Another challenge Tarek said is the gap between the date the contract is awarded, and the actual contract signing date. Giving an example, he says: “We get selected for a project and in some cases we receive a letter of intent. The next morning or the same day you receive an outlook invitation from the client for mobilisation. But I have not received the contract yet as it is under revision. Sometimes it takes up to four weeks to a couple of months, until it has the internal approval from the client’s department. But what about the risks that I’ve taken over the past few months, which is not accounted for?”
Nizameddin pointed out that the clients also have the right to suspend the service or terminate the contract. “Sometimes they give you one month’s notice or two month’s notice [ before they terminate]; but you as service providers, you don’t have this right.”
In a nutshell, Nizameddin says that clients are leaving FM service providers with two options: either to accept the risk, which means service providers have to increase their price, or they will have to decline the opportunity, which means that the client will lose the opportunity of dealing with reputable service providers.
However, Nizameddin says that there has been some improvement lately. “The positive news is that we have started seeing some changes. We started receiving contracts with some reasonable terms, it’s not 100% but I can say that there is an improvement of 20-30%.”
He also went spoke about employee welfare and things like staff accommodation, health and safety and paying salaries on time should be prioritised.
“When it comes to the living conditions there should be washing facilities, catering, gym, libraries and entertainment. Also proximity to the work site should be less. It is not acceptable anymore that you have your workforce travelling for two hours every day from the staff accommodation to the work location.”
“You should also provide good heath and life insurances. A simple math will show you that a very good medical insurance will achieve a lot of savings for you when it comes to sick leaves and your employees’ satisfaction. It will reduce resignations. Life insurance will not cost companies a lot of money but it will give more satisfaction to your employees. It will give them more assurance that will give provide a more stable workforce.
“Lastly, it is very important to pay salaries on time. All the companies should be respecting this,” he concluded