Before getting into the contract process, you should know about facility management. Such a field of study includes the management of physical workplaces and their relation to people and processes. It includes services like:
Building maintenance
Services related to cleaning and janitorial management
HVAC systems management
Security
Waste disposal
Landscaping
Catering and hospitality
Energy and utility management
Facility management can be either hard services (technical and infrastructural) or soft services (non-technical and more people-oriented).
Facility management contracts are formal agreements between the service provider and clients that outline services provided, payment terms, responsibilities, and performance metrics. Key Benefits:
Protecting the two parties legally
Well-defined scope and deliverables
Quality control and performance
Assists in handling risks and liabilities
Keeps the safety and environmental standards in check
As of 2025, the facility management contract procedure is mostly digital but still adheres to rudimentary legal and commercial structures. Here’s how the process works:
Evaluating the requirements of the client is the first step in any facility management contract. This includes:
Types of facilities (such as residential, commercial, or industrial)
Size and complexity
Types of services required
How often and when services are provided
Regulations or safety requirements Unique
For example, a healthcare setting such as a hospital might require janitorial services 24/7, while a corporate office might only require maintenance during the weekdays.
Pro Tip: It is also important to advise that you should always do a site survey or facility audit before defining the scope.
When the scope is formulated, the client gives a Request for Proposal (RFP) or Invitation to Tender (ITT) to desired vendors. This document includes:
Project background
Scope of work (SOW)
Service level expectations
Evaluation criteria
Timeline for submissions
Budget guidelines
Pro Tip (2025 update): In a lot of geos, this whole process gets conducted through e-procurement platforms for increased transparency and to speed things up.
Once they get the proposals, the client evaluates vendors based on:
Experience and credentials
Pricing and cost breakdown
References and previous performance
Certified (i.e., ISO, OSHA)
Industry standards compliance
(Trend, 2025): AI-driven systems enabling vendor scoring are now ubiquitous in the marketplace, scoring suppliers based on past data and predictive analytics.
After shortlisting a vendor, negotiations are later held to finalize:
Terms and conditions
Payment schedules
Key Performance Indicators + Service Level Agreements
Penalty clauses and indemnity
Agency commitments for staffing and equipment
Trend 2025: Blockchain-powered smart contracts are used to automatically enforce terms once conditions are satisfied.
Then, once they negotiate successfully, a formal contract is written. A facility management contract covers a range of services, and it generally contains the following:
Involved parties (client and service provider)
Effective date and duration
Detailed scope of work
KPIs & performance standards
Pricing model (fixed, per-unit, or hybrid)
Invoicing and payment terms
Force majeure clause
Termination conditions
Key clauses — insurance and liability
Dispute resolution mechanisms
Clauses on confidentiality and data protection
2025 Trend: Contracts will now include sustainability goals, compliance toward ESG, and cybersecurity standards for digital FM platforms.
On both sides, legal teams will need to review the drafted contract. That way, the contract ensures:
Local labor, safety, and commercial law compliant
Does not contain loopholes
With clearly defined terms and measurable KPIs.
In 2025, for example, digital tools such as AI-powered legal review platforms can be used at scale to identify obscure terms or legal inconsistencies needing manual review.
After vetting and approval, the contract is signed — usually through a secure digital signature platform (e.g, DocuSign or Adobe Sign). Onboarding includes:
Introduction meetings
Site handover
Staff training
Mobilization of equipment and resources
Establishing communication non–negotiables
Usually, there is a soft launch or trial period during which processes are fine-tuned.
Contracts often include SLAs and KPIs for tracking vendor performance. Periodic audits, inspections , and reviews are planned. Common KPIs include:
Time taken to respond to service requests
Customer satisfaction scores
No adherence to maintenance schedules
Equipment uptime
2025 Trend: Facilities leverage IoT sensors, BIM platforms, and FM dashboards for real-time monitoring/automated reporting.
As circumstances change, service needs may evolve as follows:
Scaling up or scaling down a business
Regulatory changes
Performance issues
Contracts will often include a change order clause to allow for these changes to be made in writing as a change to the contract.
When the time has come for the contract to end, the client might opt to:
Re-issue the contract with the new terms
Outsource the services to third parties
Book termination for performance or shifted strategy
Proper exit management ensures a smooth transition process with minimal disruption. This includes handing over data, reallocating staff, and removing equipment.
There is no single facility management contract in 2025, there are several types of agreements:
Lump Sum Contracts: Set price for an agreed upon work scope.
Cost-Plus Contracts: Cost incurred plus a percentage fee or fixed fee
Results-Based Contracts: These are based on results and KPIs.
Integrated FM Contracts: Multiple services being provided from one provider.
PPP (Public-Private Partnership): This is common for large-scale infrastructure projects.
In general contract procedure in facility management in 2025, there is a shift toward digitized, automated, and performance-based contracting, where AI and blockchain will change how agreements are made and managed.
Whether you are a facility manager, service provider, or property owner, knowing these latest contracting practices will aid you in building better partnerships and ensuring you deliver consistent service excellence.
Outside of legal work, what is the process between commoners and royal families like in terms of duration?
Unclear scope or general performance measures that give rise to disputes.
Yes, provided that the termination clause violations are fulfilled, such as SLA breach, non-payment, or mutual agreement.
Generally speaking, yes, in most jurisdictions. Nonetheless, human-readable hybrid contracts are still more popular.
