The Efficiency of Integrated Facilities Maintenance Contracts (FMC) for Public Buildings: The Impact of Contractual and Physical Characteristics

Abstract

Abstract

Public Facilities Maintenance Contracts (FMC) are critical for ensuring the functionality, cost-effectiveness, and longterm performance of government buildings. In recent years, integrated contract structures have gained prominence as they provide a single point of responsibility and promote better service coordination. However, inefficiencies remain, largely stemming from inadequate resource allocation and insufficient performance oversight within these arrangements. Despite their growing importance, limited research has investigated how contractual and physical characteristics influence maintenance contract efficiency. This study addresses this gap by evaluating the efficiency of integrated FMC in Malaysia using data from 45 government contracts. Each FMC efficiency was measured using a normalized per annum Present Value (PV) method and correlation analysis of key variables, including contractual characteristics (contract value and period) and physical characteristics (building size, number of storeys, number of blocks, and building age). The analysis reveals that efficiency decreases with higher contract values, extended contract periods, and buildings with multiple blocks, while taller buildings demonstrate marginal efficiency gains. Interestingly, building age does not significantly influence contract performance, highlighting the role of contract design in driving efficiency outcomes. The study emphasizes the importance of careful contract planning and well-structured agreements with explicit provisions for performance-based incentives to enhance maintenance efficiency. Aligning contractual frameworks with building attributes is, therefore, critical for optimizing resource allocation and improving public infrastructure maintenance practices.