Introduction: The Procurement System is Broken

FM contracts in the UK are failing at an alarming rate—and it’s not an accident. The procurement process itself is structurally flawed, creating a cycle of low-cost bidding, poor mobilisation, and operational failure.

• Procurement teams are bound by rigid cost-driven models, not service quality.
• FM providers knowingly bid below sustainable levels, expecting post-award negotiations.
• Mobilisation is rushed, data is unreliable, and service handovers are chaotic.

Baachu has been involved in 80+ FM procurements and nearly 300 FM bids, working directly on major government contracts, private sector outsourcing deals, and FM framework agreements. We’ve seen firsthand how UK procurement rules and FM contracting models are setting these contracts up for failure.

This isn’t a theoretical problem—it’s happening in live contracts today.

Why FM Contracts in the UK Keep Failing 

1. Lowest-Cost Bidding Destroys Contract Viability

UK public sector procurement rules, particularly under The Procurement Act 2023, reinforce a system where cost dominates over service delivery.

• Clients push for “best value” but evaluate bids primarily on cost.
• FM providers price aggressively to win, then rely on variations and change orders to recover losses.
• Price scoring mechanics in frameworks and tenders create a race to the bottom—whoever bids the lowest, wins.

❌ This creates contracts that are financially unsustainable from day one.

2. Mobilisation is an Afterthought, Leading to Immediate Failure

FM contracts require an intense transition period, yet most UK tenders treat mobilisation as a footnote.

• Data provided in tenders is often outdated, incomplete, or wrong.
• Asset verification is treated as the new provider’s problem, even when the incumbent should have maintained it.
• Staffing transitions under TUPE are unpredictable, with key personnel leaving before Day 1.

❌ Mobilisation should be a contractual milestone, not an assumed step. Without a structured, enforceable mobilisation plan, FM contracts start in failure mode.

3. KPIs and SLAs Reward Reporting, Not Service Performance

Most FM contracts in the UK are obsessed with compliance metrics, forcing FM providers to focus on checking boxes instead of improving service quality.

• KPI structures prioritise documentation, not actual problem-solving.
• SLAs are often unrealistic, punishing providers for operational challenges outside their control.
• Penalty mechanisms create defensive contract management—FM teams prioritise avoiding fines over innovation.

❌ The system rewards “playing the contract” instead of improving service delivery.

4. Contracts Are Handed to Delivery Teams With No Context

The FM teams that write bids are rarely the same teams delivering the contract.

• Bid teams make commitments they don’t have to implement.
• Operations teams inherit unrealistic SLAs, cost models, and service assumptions.
• No contractual link between procurement and contract management means providers get blamed for failures they didn’t cause.

❌ This disconnect between procurement, contract management, and service delivery is a major reason FM contracts fail.

5. No Accountability for Repeating the Same Procurement Mistakes

The UK has spent decades outsourcing FM contracts, yet procurement models haven’t evolved.

• Government and corporate buyers recycle old contract templates, even when they failed previously.
• There is no structured post-contract analysis to feed lessons into future tenders.
• The same mistakes—bad data, low bids, weak mobilisation—happen in every procurement cycle.

❌ Without institutional learning, FM procurement is destined to keep failing.

What Baachu Has Done to Fix This

We don’t just analyse these failures—we actively fix FM contracts in real-world procurement processes.

For FM Buyers (Public & Private Sector Procurement Teams)

✔ Rewrote FM contract structures to align procurement with realistic service delivery.
✔ Built FM pricing models that balance competitive costs with sustainable contract performance.
✔ Led post-contract reviews, identifying failure points to prevent repeat mistakes in future tenders.

For FM Providers (Bidders & Delivery Teams)

✔ Created cost modelling tools to ensure realistic pricing in competitive tenders.
✔ Developed mobilisation frameworks that force structured, enforceable handovers.
✔ Built AI-driven contract performance dashboards to track risk, asset verification, and service KPIs.

For the FM Industry

✔ Consulted on framework agreements to improve tendering and contract governance.
✔ Ran AI-readiness assessments to improve operational data transparency.
✔ Worked on TUPE transition strategies that reduce workforce instability during contract changeovers.

This isn’t theory—this is work we’ve done in live FM contracts across the UK.

What Needs to Change?

FM contracts will keep failing unless fundamental changes happen at both the procurement and service delivery level.

✔ Procurement teams must stop prioritising lowest cost over service sustainability.
✔ FM providers must bid based on realistic costs, not short-term contract wins.
✔ Mobilisation must be an enforceable contractual milestone, not an assumption.
✔ SLAs and KPIs must align with operational realities, not just compliance metrics.
✔ Procurement, contract management, and operations must be continuously aligned.

FM procurement needs more than a few adjustments—it needs a full structural reset.

Baachu is leading this change. If your organisation is ready to stop repeating the same procurement failures, let’s talk.

Contact us at hello@baachu.com to build FM contracts that actually work.