Significance of FTE Numbers in FM Procurement

Abstract : Supplier assessment during the negotiation and commercial bidding phases has largely been based on factors of service quality capability as well as the unit price for services along with specified labour rates. However, it is not uncommon for the buying organizations to be baffled by huge invoiced bills despite utilizing the strongest of their negotiation skills. These situations are more prevalent in cases where organizations have large number of smaller office locations across a vast geography. What goes missing from the procurement discussions is the assessment of the optimal FTE number required to provide the desired service levels. This paper highlights the importance of this otherwise underrated factor of optimal FTE count in the procurement decisions. The factors affecting the FTE number and the means to arrive at this number have been covered in this white paper. The paper also attempts to answer how must these numbers be interpreted and what are their implications on the engagement strategies with the FM suppliers.