3 Often-Overlooked Industries When It Comes to Contractor Management

By Brad Hestbak
Last updated: August 23, 2019
Key Takeaways

Managing complex facilities often requires contracting a lot of outside help, which makes a good contractor management solution critical.

Contractor management is often overlooked when it comes to the administration and maintenance of municipal, commercial, and educational facilities. While the scope and significance may not be the same as some other industries, the scale of contract management in these sectors is substantial due to the growing reliance on specialized skill sets and technology to meet organizational goals, as well as the escalating costs of keeping expertise on staff.


(Learn more in Contractor Qualification Gets Real Results.)

Effective contractor management related to these three sectors has both similarities and unique attributes when compared to industry. Each of these sectors highlight why outsourcing can be an advantage to your organization, and why the very best in contract management is essential.


1. Educational Facilities

In response to increasing demands and diminishing resources, organizations are using contractors to provide a variety of support services so that their regular employees can focus on activities more directly related to the core mission.

School districts and colleges contract services like building management, janitorial, or food services so that they can better allocate their resources to matters of teaching and learning.

2. Municipalities

Local governments handle hundreds, if not thousands, of contracts. Because of the costs of liability related to the mismanagement of contracts, contractor administration has become a critical part of operations.

3. Commercial Buildings

Commercial building managers require a variety of specialized skill sets to meet client needs at a moment's notice. By outsourcing services, these managers can respond to a higher number of issues with the appropriate expertise and reduce the costs incurred by full-time staff.

(Find out How to Scale Contractor Management for Larger Contractor Pools.)


The Advantages of Contracting Facility Maintenance

As organizations look for ways to ensure that internal and external services are available, and that associated costs of both remain competitive, outsourcing selected business activities has become commonplace.

The following are the main advantages of using contractors for building maintenance.

1. Getting the Most from Your Facility Manager

Facility managers don't always have the time or the specific skill needed to deal with every maintenance problem or to oversee the details of every kind of business relationship. By outsourcing a variety of critical services, companies can allow their facility managers to oversee the big picture rather than being bogged down with repetitive day-to-day issues.

2. Streamlining the Process by Prequalifying Potential Contractors

Public entities like school divisions and municipalities often use a contractor prequalification process to assess a contractor’s work history and ability to deliver goods or services. In these cases, prequalification is often mandatory for any contractor bid submission.

(Learn about The 4 Stages of Contractor Management.)

3. Cost Savings to Your Organization

Services contracted to experts will provide you with more work completed in less time than the typical on-staff maintenance generalist. Because maintenance and management issues are dealt with by professionals, there are fewer costs associated with recurring problems.

4. Reducing Costs Associated with Employee Benefits and Insurance

Outside agencies contracted by your company are responsible for costs related to insurance and any liabilities related to their work. They are also responsible for the costs of any benefits to their employees like healthcare, vacation, and professional development.

5. Ensuring a Fair and Equitable Process

Contracting for goods or services requires a fair, equitable, competitive, and transparent process that ensures work is done on budget, on time, and to the satisfaction of all stakeholders. Contracting for services by public agencies is regulated in most jurisdictions.

Communication Is Essential to Contractor Management

Contracting services to an outside source can be met with skepticism or opposition by full-time employees and unions. Because of this, it is essential to discuss with your employees any matters regarding contracting out, and to do it prior to the announcement of any related decisions.

No matter the type of industry or the size of your business, working with contractors and maintaining a good relationship with your employees will require a good deal of planning and proactive communication.

(Learn about Contractor Management Best Practices.)

New Technology to Support Contractor Management

Digital technology for managing contractor relationships and contracts has become widespread with a variety of cloud-based and in-house solutions available.

There are many advantages to using this kind of technology, including:

  • Standardizing contracts and processes
  • Optimizing contract performance and maintaining a better contract renewal cycle
  • Automated notifications related to contract milestones, key deliverables, and regulatory compliance
  • Managing a high volume of contracts from anywhere and reducing costs by minimizing contract staff requirements

Moving Forward

With decreasing resources, restrictive budgets, and the increasing cost of doing business, a focus on operational efficiency and the strategic outsourcing of selected services has become the norm.

As the volume of contracts increases across school districts, local government, and commercial facilities, so has their reliance on contractor management technology. Contract management software has become the preferred solution for these complex organizations, providing them with an efficient, up-to-date overview of all of their contracts and the ability to access information at a moment’s notice.

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Written by Brad Hestbak

Brad Hestbak

Brad is a writer, content developer, and business consultant. His work focuses on enhancing the capacity of individuals, businesses, not-for-profits, and communities through information design and content creation.

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