Contracting in FM: collaboration, coordination and control

Purpose – As public authorities and private companies increasingly outsource facilities management services to external suppliers, a new service industry with its own culture and contracting practices is developing. The aim of this paper is to examine how procurement processes and contract models relate to trust and collaboration in interorganizational relationships in FM. Design/methodology/approach – The study is based on interviews with leading Swedish clients, consultants and service providers. Findings – Contract‐related formalization serves purposes of learning and coordination as well as of performance control. Thus, services need different contract design and different management depending on the interaction patterns they entail. Detailed specifications and monitoring may be needed in order to increase mutual understanding, build trust and foster a sustainable industry‐level contracting culture. Research limitations/implications – The findings refer to the Swedish situation, where the legal role of the formal contract differs from that in common law countries. Practical implications – Typically, low‐level interaction relations such as technical property services need a focus on fostering trust, while high‐contact soft services call for transparency and distance. Further, detailed specification and formalized monitoring are more important for non‐strategic support services that may otherwise be left unmanaged and receive low attention from client management. Originality/value – The paper relates general literature on trust and contract to the FM industry, identifies variations in contracting needs depending on the type of service and considers industry‐level development.