Total Facility Management, 4th Edition

Appendix C

Risks involved in outsourcing

Planning to outsource

• Are the objectives for outsourcing correctly identified?
• Is the service to be outsourced adequately scoped and defined?
• Have the direct and indirect costs of delivering the outsourced service been adequately calculated?
• Will adequate competition be generated from credible service providers?
• Does the outsourced management team have the right number and mix of skills?

Shortlisting of prospective service providers

• Are there appropriate evaluation criteria?
• Are there adequate safeguards against corruption or bias in the evaluation?
• Is there sufficient expertise on the evaluation team?

Negotiating contracts

• Have end-user requirements been translated into business requirements?
• Are measures of service provider performance defined?
• Are appropriate penalties for unsatisfactory service provider performance included in the contracts?
• Is the organization’s contract protected against the service provider making excessive profits?
• Are the contingency plans that would apply in the event of disasters defined?
• Are there adequate safeguards against the commercial failure of the service provider?
• Are termination arrangements specified?
• Are there adequate safeguards to protect the confidentiality of data?
• Are there appropriate arrangements for the control of assets?
• Are there plans for transferring the employment personnel in an orderly fashion, where this applies?
• Is adequate audit access provided for in the contracts? ...