Measured term contracts; suit property owners with a large portfolio wishing to undertake planned maintenance, repair or improvement work.
It is best applied to a relatively compact geographical area containing a significant number of properties and therefore is often used by public sector clients.
Our first-hand experience has enabled us to guide clients through the process of advertising contracts in accordance with EU rules, contractor short listing and selection, preparation of the work schedules and tender documentation, tender analysis, contractor nomination and contract signing; and, eventually, post contract auditing.
The basis of a measured term contract is a schedule of rates; selected contractors are invited to submit a tender with a percentage on, over or under the rate. Each contractor has to allow for his profit and overheads in the rates. The documentation sets out response times for undertaking certain categories of repair; the geographical area to be covered; the length of term (usually 3 - 5 years); the number and type of building to be maintained. Sometimes there is historical data as a guide to potential workload.
The advantage to the property owner is speed of response, control of cost and budget certainty over a period of years.
The advantage to the contractor is certainty of workload and easier billing after work has been completed.
Most contracts provide a method for adjusting rates periodically, usually by reference to the RICS Building Cost Information Service indices.