Three Threats to Cost Transparency in Cost-Plus Facility Services Outsourcing

Facility managers often take comfort in the cost transparency that cost-plus and guaranteed maximum price (GMP) pricing models traditionally provide in facility management outsourcing deals, but there are increasing methods that suppliers are using to chip away at that protection. There are three threats to the cost transparency that a facility manager may be expecting in a facility services outsourcing deal: limited and restrictive audit rights; purchases of supplies/food from related parties; and rebates/volume allowances.