This blog series focuses on best practices for the asset management of real property including buildings, grounds, furnishings, and equipment.

by John zumBrunnen, CEO and Founder, zumBrunnen, Inc.

In-House Maintenance Versus Service Contractors

There are various types of maintenance services that can be outsourced, such as landscaping, HVAC mechanical systems, elevators, laundry equipment, and life safety equipment, to name a few. Regardless of the size of a community, almost every community will benefit by outsourcing some maintenance services. The initial thought process for most is the more that can be managed in-house, the better, based on having direct managerial control and on the assumptions that it will cost less. However, these assumptions are not always correct. Often times, outsourcing is more cost efficient, has lower managerial risk, and produces better results. This especially applies to special systems and equipment, i.e. elevators. Considerations are quite the opposite when evaluating contracts such as landscape maintenance. For communities with large grounds to maintain, managing the additional staff and equipment can prove expensive and problematic, where outsourcing may prove best.

Larger communities typically have the most opportunities to justify outsourcing. Regardless of the size of your community, there are pros and cons to both scenarios, and the decisions as to which services to keep in-house are best made when considering all aspects.

In-house Maintenance:

  • In-house maintenance staff oftentimes seems like firemen, moving from one “emergency” to another. In this situation, routine maintenance may be interrupted or omitted altogether, by more pressing matters
  • In-house staff must be a “jack-of-all-trades”, and may be less than the best at certain types of equipment and systems; especially most challenging for smaller communities
  • In the event of an emergency, in-house service can usually respond more quickly than a contractor can
  • Many residents become acquainted with in-house maintenance personnel and derive a certain level of comfort from the relationship. This is especially important when maintenance is performed in a resident’s own unit
  • Employing, training, and managing the various maintenance staffs have added challenges and unique risk considerations

Service Contractors:

  • Formal reports are provided by the contractor providing assurance that maintenance is actually done and records maintained; they are less subjected to interruptions resulting in deferred maintenance
  • Contractors should have extensive training, varied experience and, therefore, should be highly competent
  • Contractors should remain current with federal, state, and local regulatory requirements (i.e. OSHA), mandated reporting requirements, and changes to codes, trends, and improvements making the necessary changes and recommending improvements
  • Contractors can usually spot problems not seen by less-experienced in-house staff
  • Contractors may provide their own equipment, materials, and storage
  • Certain jobs requiring unique skill sets may only be needed on a very limited time basis

Following is a list of maintenance services frequently provided by service contractors:

  • Landscape and grounds
  • Pest control
  • Snow removal
  • Trash removal
  • Central plant and HVAC systems
  • Fire sprinkler and alarm systems
  • Emergency generators
  • Elevators
  • Fire extinguishers
  • Kitchen hood & grease trap cleaning
  • IT, sound and communications
  • Biohazard waste
  • Ponds and pools

About the Author:

John zumBrunnen is Founder and CEO of zumBrunnen, Inc., an independent construction and building consulting firm founded in 1989. zumBrunnen has a BS in mechanical engineering from the University of North Dakota, completed the US Army Corps of Engineers Training Program in 1972, and is a member of LeadingAge and Community Associations Institute on national and state levels. zumBrunnen has 40+ years of experience in construction, property assessment, development, and reserve budgeting. He is the inventor of the FacilityForecast® software system and a respected author and speaker in the industry.

One Response to “Asset Management of Real Property – Part 5 of 9 – In-House Maintenance Versus Service Contractors”

  1. Avatar for Aaron Keller

    July 26, 2017 at 6:50 pm, Aaron Keller said:

    John,
    You provide an invaluable service (to say nothing of the good information in your regular emails)!

    Thank you so much for doing so. We just completed a $17.5 MM project to completely renovate and add on to our NF her in Story City, Iowa. The project began with a thorough report from your organization which made abundantly clear the capital implications of not doing the project.

    Reply

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