Hard and soft facility maintenance operations risk and the payment mechanism

Government will normally predetermine the level and type of hard and soft services to be provided by the private sector.  Generally this will exclude core services but include soft non‑core services such as cleaning, garden maintenance, security and catering and hard facility maintenance services like routine and major periodic building maintenance.  Government may also include energy management and cost into the payment package.

The private party should bear the risk that the contracted services are not delivered according to the agreed specifications and/or within the projected costs.

This risk allocation is reflected in both the contractual provisions and the payment mechanism.  The larger the size of hard and soft facility maintenance service packages, the more effective is the payment mechanism in influencing service performance.