Performance ContractingHow to be Sure it Works Well

Abstract

The economy isn't in a recession these days, but everywhere you
look companies are downsizing, outsourcing, and, in general, learning to
live on less. One of the areas of less seems to be capital funding for
facility improvements.
Facilities management departments have always been the poor re-
lations in the capital funding buffet, with management often viewing
facilities engineers as janitors with screwdrivers. Even projects that pay
for themselves and bring along a host of non-monetary benefits often
find difficulty getting funding. What's a facility manager to do?
Here comes performance contracting to the rescue! (Well, maybe
not exactly like that.)
The energy services industry was conceived in the late 1970s and
developed in the early 80s to address several problems. The industry
recognized that most companies aren't in business to manage facilities.
Facilities are a necessary evil that must be taken care of on the way to
executing a core business, be it providing insurance, selling widgets, or
publishing magazines. As a result, management generally has difficulty
getting excited about putting money into some thing called an "EMCS"
(energy management control system) or "VAV" (variable air volume)-
which they don't really understand-when they could be using that
money to automate their customer billing system or put in a new pack-
aging line.