Published in the April 2007 issue of Today’s Facility Manager
All major facilities have systems they consider critical. The cost of maintenance becomes an issue when those facilities have complex mechanical and electrical infrastructures. One strategy for critical facilities to make the most of maintenance dollars is to use Service Level Agreements, also known as SLAs. Properly applied, SLAs can be a good way to bring skilled and well trained maintenance personnel into a critical facility on an “as needed” basis, providing substantial savings over time.
Most of the time, SLAs are sensible contracts for service. But when applied to critical facilities, SLAs can have pitfalls, especially if they fall short of their intended purpose.
Why would this happen? The reason is fairly simple. Frequently, facility managers see SLAs as supplements to their workforce. They don’t consider that personnel hired through an SLA may need even more supervision and management than in-house staff to ensure proper job quality.
To some degree, the work force used under an SLA cares about on-site job quality. However, that work force gets its paycheck directly from an external employer. Therefore, it is up to facility managers to make sure the supplemental work force puts the right amount of effort into the quality of service it delivers.
How do facility managers support the services covered by the SLA? First, there must be concerted effort to establish a relationship from the moment when the vendor first comes on-site to do the work. Then the facility manager must review the work in progress, examine the final result of the work, and agree for the work to be completed before the vendor leaves.
There is a very real possibility for disaster if SLAs are left to fend for themselves. For instance, if the facility manager fails to monitor the situation properly, the contractor may opt to fulfill its own interests at the facility’s expense. Without suitable involvement in supervision, facility managers will end up being unaware of what is being done “to”—rather than “for”—them.
When hiring employees through an SLA, managerial responsibilities for facility professionals are the same as for any direct employee. The actual agreement with the contractor should spell out training, insurance, security requirements, and other working conditions just as if the employees working under the SLA reported directly to the on-site facilities department.
In the area of maintenance, an SLA requires a needs assessment as a starting point (since maintenance can often cover anything from troubleshooting and repair to operation of the building support infrastructure). The assessment should incorporate service standards (standards for technicians and materials supplied, charges for time and materials used, and parameters for response time) that meet the requirements of normal operating procedures as they apply to the equipment being maintained, escalation procedures, and out of scope repairs that often accompany the maintenance effort.
Consequently, the work scope must be clear in any SLA. The facility manager must spell out three things: the expectations for the companies being offered the opportunity; the technicians being supplied by the companies; and the metrics that will be used to measure the performance of the technicians and the companies under the SLAs.
The clarification process starts with a definition of what skills will be handled by the in-house team and what will be outsourced. This is not a rote task, but one that takes some thought. For instance, tasks that require specialty training would be considered for outsourcing. Tasks that are repetitive and time consuming might also be candidates. This takes a different skill set, a different level of sophistication, and a contractor who can provide semi-skilled labor.
Manpower budget considerations are also drivers for outsourcing. There may be an issue with crew size, turnover, or some other mitigating circumstance that would make outsourcing maintenance work a good solution. These politically driven outsourcing requirements do not diminish the need for contractor scrutiny or careful development of an SLA.
Eligible contractors would be those who are able to provide valid credentials to do the work required in the SLA (since they will be asked to supply insurance certificates, legal documents, and the appropriate licenses and certificates that demonstrate their proficiency). These contractors will have to present technicians who can meet the security requirements of the facility manager as well as adhere to the codes of conduct enforced throughout the site.
Of equal importance to the quality and training of the supplemental workforce is the consideration of material acquisition, delivery, and installation by the contractor. Most SLAs require that materials must be supplied as well as labor.
In fact, depending on the work scope covered in the SLA, the materials provisions might be even more critical. Facility professionals who spend a significant amount of money on equipment or supplies will want that investment treated in a certain way. Those rules must be conveyed to the contractor, who will then be held responsible through the conditions of the SLA.
As large scale consumers, facility professionals depend on availability of product and reasonable pricing. This will play a significant role in SLAs if the vendor doesn’t have strong relationships with suppliers or lacks the resources to support creative stocking strategies. For instance, if the SLA needs include critical parts, does the contractor have “preferred supplier” status for immediate requisition privileges? And what is the contractor’s warehousing capability?
Warehousing can be a tricky requirement. There may be a time when a contractor will be asked to keep long lead, seldom used items in stock. For critical spares stocking, the SLA should spell out a minimum/maximum restocking strategy to prevent the possibility of a shortage at a crucial time. Delivery of material is a key success metric.
The development of an SLA is much the same as that of an in-house maintenance program. After all, it’s really nothing more than an extension of that program, and it should deliver the same level and quality of service.
A contractor hired to perform work under an SLA should be able to demonstrate a quality assurance program that includes oversight of paperwork management, including all work orders. Request forms for preventive maintenance (PM), repairs, and other related work should be properly filled out, filed, and accounted for. This quality assurance includes self audits to assess the quality and reliability of the SLA employee’s response to the needs of the facility manager.
Then there is the discussion about evaluation. How will a maintenance effort be evaluated? Should it be performed by in-house staff members or outsourced personnel?
There are many elements to these efforts besides simple maintenance of the piece of equipment. Who correlates the repair and maintenance efforts? Who creates a replacement plan? Who establishes an upgrade plan? What are the circumstances that trigger such planning? Who coordinates material acquisition and, in the case of discarded material, hazardous material disposition?
Facility managers clearly need to be in control of the development of the answers to these questions. A contractor under the umbrella of an SLA can provide data as a metric that is measurable. But a contractor under an SLA cannot be expected to have the same investment as a facility professional in making replacement and upgrade suggestions and plans for equipment that is owned by the organization.
Evaluation should include standards of service provided, including the following:
- Time to respond and time to return to service (in the case of maintenance efforts);
- How well all parties handle their responsibilities;
- Measurements of service effectiveness;
- Review of customer satisfaction; and
- Use of escalation procedures (including resolution of service related disagreements).
The customers served by the contractors who have an SLA will have opinions about the work done under the SLA. Courtesy, timeliness, and overall satisfaction with the work done are all measurable.
There is also public perception when it comes to customer service. Did the person completing the maintenance work appear knowledgeable and responsive? How unnecessarily inconvenienced were the customers by the contractor’s work? All of these items are elements to consider.
There are additional benchmarks that can measure the success (or failure) of work provided under SLAs. Suggested metrics include the following:
- Perform 100% of PM work at critical facilities accomplishing 95% completion of scheduled PM requests each month, with no PM deferred more than one month.
- Respond to emergency events within 15 minutes by reporting to to the critical facility or HVAC Building Monitoring System (BMS) station, as appropriate.
- During events/emergencies at critical facilities, determine within the first 30 minutes of a response whether or not on-site critical facility staff can make repairs. If not, notify management and request additional resources.
- Have a notification system that can reach 90% of customers and announce scheduled maintenance or repair events when widespread disruption is expected (or could occur) if something goes wrong.
If there is a common theme among successful maintenance SLAs, it is that they were created as if the workers covered by the SLA were employed directly by the organization. Contractors covered by an SLA should reflect the best qualities of the facility management department. This will help to overcome the fact that the contractor and its employees have their own distinct goals.
SLAs have a very important place in maintenance planning. The benefits of these arrangements are far reaching in the world of maintenance as long as the obvious pitfalls are avoided. Under optimal conditions, SLAs can be a very powerful tool for facility professionals responsible for the complex world of critical facilities.
Atkins is principal at EYP Mission Critical Facilities of San Francisco, CA and has over 35 years of experience in technical design, installation, operation, and maintenance of complex commercial and industrial facilities.