Universities are quirky places to work, especially for facilities management personnel. Where else could you be responsible for making sure dozens of 19th-century buildings keep working well, while you’re overseeing the construction of several new buildings? Then there’s the mix of equipment: chilled water systems, rooftop units, cogeneration plants, and even window air conditioners in some cases.
Traditionally, long-time facilities management employees have kept this diverse mix of buildings and systems working as best they can. Yet these same long-time employees are one of the reasons why some universities are looking to outsource. Complacency has set in at many universities. Facilities personnel who are very comfortable in their positions may not be responding as quickly to requests for service, or they may not be as customer-service oriented as administrators would like to see.
Outsourcing firms are seeing this as an opportunity to show universities that they can bring in an organized and managed company to do almost any part of the facilities work that is required. Some universities are finding this to be an attractive option – especially when they’re dealing with a staff resistant to change. Or, they may be having trouble attracting a qualified staff at all, due to labor shortages. Existing facilities management staff maintain that universities are far too complex for an outsourcing firm to manage effectively. In addition, they state that outside firms have no credibility with faculty and students, who would prefer to deal with in-house facilities management personnel.
A Prime Motivator for In-House StaffComplacency is one of the biggest issues facing many universities, says Dave Millay, CPE, former Association of Facilities Engineers (AFE) national president and current chairman of the AFE Foundation Board. While he has never had to outsource any of his facilities management functions, he continually stresses to his workforce the need to provide quality services.
“The way for [facilities personnel] to stay put is to provide ever better quality and ever better services. That’s the vision we have to put in front of ourselves to keep the senior administration from ever considering outsourcing. We need to run our organizations like a business. We need to be sensitive to the customer needs – we can’t be complacent,” says Millay.
In fact, the threat of outsourcing can even work to the benefit of the facilities management staff, who are definitely feeling the pressure these days to do their jobs better and more efficiently. Knowing that a university has another option available may make existing facilities management personnel look more closely at the customer and determine what the customer needs and wants to be happy.
Mike Carson, senior mechanical engineer, Purdue University (West Lafayette, IN) says that the threat of outsourcing has been beneficial, because it has made people think outside of the box. “It has forced them to look very critically at what they do and how they do it, and to ask: Is there a better way to perform the functions that need to be carried out?”
Not everyone has embraced this way of thinking, though, which sometimes to leads to frustration on the part of administration. It’s when existing staff refuses to change that many universities start considering outsourcing. But change is difficult for most of us, especially for those who have been performing in the same mode for years and even decades.
Carson says that the boom economy has led to an increased work load for everyone. “Because there’s more money available, there’s more work to be done, so there’s more work expected from the existing staff. The existing staff is now also expected to change the way they do things, and many people aren’t able to change quickly. Since there’s a lot expected, there’s a frustration when it’s not produced.”
Then in comes a good salesman from an outsourcing company, who says he can take care of the whole operation with guaranteed results, and because of the frustration level on the part of university administrators, it sounds appealing. It’s especially attractive given that we’re in an age where we expect instant results.
What used to be an acceptable time lag between concept and implementation is now unacceptable, says Carson. “We’re expecting things to move much more quickly. If a company can come in and claim that they’re able to satisfy the enduser, the university is going to look very seriously at it.”
Millay believes that while some universities have tried outsourcing various functions over the last five years or so, there have been too many well-publicized failures (see sidebar, p. 48) for others to jump on the outsourcing bandwagon.
“Senior management is lured into outsourcing for several reasons – one is they perceive they’ll get better quality of services. And they perceive they’ll get a lower cost incurred by outsourcing. And they don’t have the headaches of overseeing all the people. As it turns out it doesn’t really work out well that way. ... We’re seeing a lot of failure of outsourced facilities.
Administrative Antidote Can Upset SystemLane Pierce, director of plant operations development, ServiceMaster (Downers Grove, IL) disagrees that fewer colleges and universities are considering outsourcing. In fact, his company is increasing its college customer base and providing a variety of services to universities – everything from groundskeeping to custodial services to plant operations.
“We usually get involved when there’s some kind of pain going on at the university,” says Pierce. “Sometimes there’s a point where the maintenance department has gotten so complacent that they’re no longer being customer responsive, and that starts to drive thorns into the sides of the department heads and faculty.”
He notes that in situations like these where his company has been called in to help, the first thing they do is perform a customer evaluation. “Department heads start saying, ‘It’s about time you did this.’ Then the survey shows a 20% approval rating, and then it starts to sink in about how bad things are.”
Attitude is the biggest problem Pierce usually faces in universities. He notes that it is difficult to retrain the front line people to be able to see why the department is moving to a new process, a new system, or a new way of thinking. ServiceMaster starts its training by making facilities management personnel aware of what customer-related issues are, what makes up effective preventive maintenance programs, and whether or not they are focusing on the right things in the organization.
But resistance is almost guaranteed. Pierce notes that many facilities management personnel like to hoard information, believing that if only they know something, they’ll be too valuable to be let go. “For instance, if I’m the head plumber, I know where all the valves are that turn on and turn off, and because I know where all those valves are, I am valuable. You can’t replace me. That’s an attitude that gets in there.”
In response to a situation like this, ServiceMaster personnel would probably put up valve schedules and charts, as well as line drawings to show where all the pipes go. A traditional-thinking plumber may resent this, because information is being provided that only he is supposed to have. Pierce asserts that a progressive- thinking plumber would think, “Wow, this is great, now anybody can handle this, and I don’t have to be called down here to turn off a little valve on a half-inch line because the sink’s running over. Now I can focus on more major plumbing issues in the facility.”
Change and Outsourcing: Hand in HandExpansion is another time when ServiceMaster is brought in to help a university. This is the case particularly when a university is getting ready to add another campus across town, or they’re not able to groom or grow their internal staff fast enough to replicate them in a new area. Sometimes it becomes a long-term contract. Other times, the university is able to hire enough people to eventually take over.
Basically, Pierce notes, ServiceMaster and other outsourcing firms tend to be a catalyst for change. “We help go through a lot of change transitions in facilities. We’re change agents. But we also bring efficient, effective operations; cost-effective operations; responsive training programs; and a focus on the customer.” Those who claim that outsourcing firms merely defer maintenance in order to show a short-term profit just don’t know how the system works, asserts Pierce, who says the pressure is on outsourcing firms to actually put in a better program than what was there. “We have to provide that customer with three- and five-year plans to keep them ahead of what their asset needs are, plus be able to provide them some leadership and guidance on what needs to be replaced in the facility over time, and you can’t do that unless you’re taking good care of the equipment. If you don’t take care of it, it’s going to break down, and you’ll be embarrassed with the results.”
Carson notes that while his department has not outsourced any of its functions per se, it has changed from being an in-house design organization to strictly a project management shop. Now the facilities management department oversees outside engineers and architects as they do the actual design work. And while he wouldn’t rule out other forms of outsourcing in the future, provided there are enough tangible benefits to make it worthwhile, he just doesn’t think it can work as well in a university.
“An outsourcing company does not know campus, does not understand much of the background of campus, much of the dynamics of the mechanical systems within a building. Those are the kinds of things that come from years and decades of experience working on particular systems. When you outsource, you lose that. You lose all of the in-depth understanding of the systems that are on campus.”
It is obvious, however, that outsourcing companies are here to stay. And many universities are looking closely at what they have to offer. ES
Sidebar: A familiar name in a new gameJohnson Controls (Milwaukee) is also becoming an outsourcing partner to universities. The company just recently announced that it will replace an outdated chilled water plant and steam boilers, as well as install a facility management system, and upgrade lighting and fire alarm systems at 2,000-student Dillard University in New Orleans. In addition to improved building systems, the upgrade will make it easier for the university to meet the very latest IAQ standards. The new, gas-fired, energy-efficient chiller equipment will also help improve the air quality in the New Orleans area by contributing to lower emissions at the regional power generating facility. Essentially, Johnson Controls will pay to have the $8.45 million in capital improvements performed, then lease the equipment back to Dillard for the next 20 years. “Because the facility is not on the balance sheet, it allows the university to continue investing in education,” says Sydney H. Evans, Jr., Dillard vice president of business and finance. “Johnson Controls takes responsibility for delivering a quality indoor environment at a lower cost.” At press time, Johnson Controls and Dillard University were still working out who will maintain the new equipment.
Sidebar: Penn writes, then revises, outsourcing dealOne of the more well-known cases that perhaps demonstrates the difficulties of outsourcing at the college level involves the University of Pennsylvania and Trammell Crow Higher Education Services Inc. (TCHES), a subsidiary of Trammell Crow Company (Dallas).
Back in 1997, the university’s board of trustees approved a plan to outsource the university’s facilities management operation to TCHES. According to The Pennsylvania Gazette, Penn’s alumni magazine, the deal called for Trammell Crow to pay Penn a total of $32 million for the right to manage its buildings. In addition, TCHES had to hire at least 70% of the 180 affected managers and support staff.
Some members of the university community were not happy with the administration, saying that the negotiations with Trammell Crow were not publicized, leaving little time to analyze and comment on the deal. Other faculty members stated that while the university excels at many things, “facilities management is not one of them.” One member even stated that delays and other problems with projects have demoralized the faculty and staff, wasting their time and the university’s resources.
For reasons unknown (neither the university nor Trammell Crow responded to requests for an interview), it was recently announced that the relationship between Penn and TCHES will be restructured. Under the new, six-year contract, TCHES will continue to provide Penn with project management services and portfolio management services through December 31, 2005. However, TCHES will not provide facilities operation services for on-campus facilities – Penn will resume providing these services. That means about 70 campus building managers will once again become Penn employees, with the university offering them comparable positions and salaries.