Price Is a Weak Proxy for FM Value

Evidence context

Deloitte’s 2025 survey captures more than 250 CPOs across 40 countries. It shows procurement functions managing cost, risk, stakeholder expectations and digital change simultaneously. Digital leaders reported stronger performance than followers across savings, cost avoidance, stakeholder satisfaction, supplier performance and innovation enablement.

Facilities contracts make the limits of unit-price comparison especially visible. Bid prices depend on asset condition, service volumes, exclusions, labour assumptions, risk transfer, subcontracting and the quality standard embedded in the scope. A low number can reflect efficiency, but it can also reflect missing work or optimistic assumptions.

Osmos Global analysis

Value evaluation should therefore compare whole-life operating consequences. For an HVAC replacement, for example, capital price is only one component; controls integration, maintainability, energy behaviour, warranty conditions, commissioning and downtime can dominate later outcomes.

A strong commercial model makes trade-offs visible. It shows which risks are priced, shared or retained, and it establishes how volume changes and inflation will be treated. Ambiguity at award usually returns as variation, dispute or service erosion.

Osmos Global’s recommended test is whether the evaluation model can explain why a higher-priced offer might rationally win. If it cannot, the process is probably scoring compliance rather than value.

Leadership implications

For FM and CRE leaders, the issue is governance before mechanics: establish the operating outcome, evidence standard and risk boundary before choosing the commercial mechanism. Procurement leaders should ensure the evaluation model makes lifecycle value and uncertainty visible. Providers should be asked to demonstrate how their proposed method changes decisions, not merely how it produces reports.

Implementation guidance

Start with one service or decision where current performance can be reconstructed. Record the baseline, ownership, data source, approval route and foreseeable failure modes. Pilot the proposed commercial control, review exceptions with frontline teams, and scale only after the evidence survives finance, technical and user scrutiny. This creates a repeatable operating discipline instead of a one-off sourcing event.

Practical actions

• Use total-cost-of-ownership scenarios. • Normalise bid assumptions and exclusions. • Score mobilisation and asset-data quality. • Track realised value against the award case.

Risks, limitations and unresolved questions Deloitte’s evidence covers procurement broadly rather than FM contracts specifically. The FM implications are Osmos Global analysis and should be tested against local market data.

Source notes

[1] Deloitte. 2025 Global Chief Procurement Officer Survey. 19 August 2025. https://www.deloitte.com/us/en/services/consulting/articles/2025-global-chief-procurement-officer-survey.html