Resolving Vendor Disputes in Facilities Management

Disputes are a regular, if unwelcome, part of any business operations process that can run both ways across the facilities management relationship. Typically, a dispute may arise over ambiguous contract terms, failure to deliver due to many reasons, safety or security issues, and unforeseen circumstances.

Facilities managers are typically used to dealing with these disputes, working with contractors, landlords, business leaders, and tenants to resolve a problem. However, sometimes disputes can get ugly when there are clashes of leadership, changing priorities, or differing views on expectations and resolution.

The list of issues causing a dispute is broad and almost endless, with daily or long-term security problems high on the agenda of many firms. Facilities managers face operational challenges across the business landscape, such as compliance, or operational issues with external stakeholders like energy or communications providers failing to deliver.

Resolving Vendor Disputes

When a dispute arises, there is a standard checklist to follow that helps reduce friction and should bring about a speedy resolution.

Firstly, the facilities management team should engage in clear communication to find the root cause of a problem, and gain insight from all stakeholders and sides of the argument.

With that as a baseline, they can check through contracts to find out who is legally correct and consider a resolution. This can be a simple remediation and clarification of the contract if there was ambiguity.

If there isn’t a simple resolution, then the issue can be taken to arbitration. Or, if the problem is minor enough, such as under $5,000 in New York, it can be taken to a small claims court for a speedy and binding resolution. If larger issues are at stake, then legal teams can grapple with the issue and come to an agreement before the expense of a full court hearing.

If none of the parties want to turn to legal options, then it is down to the facilities managers to engage in collaboration. They can encourage all parties to adopt a problem-solving mindset. Teams can deliver innovative solutions to a facility issue, arrange a non-traditional resolution, or simply hammer out the details to find a workable arrangement.

Managing the Resolution Process

As part of the resolution process, facilities managers need to maintain open channels of communication and encourage parties to resolve the issue in the least-stressful way possible. They should document every step of the process to prevent further protests and maintain clarity.

If one party or element of the dispute remains intractable, then the others will need to work together to replace them. Common examples include changing or diversifying energy suppliers when the current arrangement is inefficient, costly, or unreliable.

In the current work environment, disputes can arise around hybrid working, which leads to changes in building or office occupancy, team dynamics within a company that is part of an agreement, and further concerns about long-term working practices. At this point, the facilities manager needs to ensure contracts are brought up to date to cover hybrid changes and other aspects, such as how artificial intelligence (AI) might change working practices, data that companies rely on, and how decisions are made between parties.

Typically, adapting to technology and societal changes all boils down to cost and budget management at the end of the day. Facilities managers should work with accounts and HR teams to ensure spending matches business needs, is focused on essential needs, and is prepared to support changing business practices.

As part of some resolutions, there is the opportunity to consider cost-cutting or changing working practices to deliver additional benefits between the parties. That is especially true if one party to the dispute is clearly in breach and wants to keep their place at the table.

The Future of Dispute Resolution

Recorded facility disputes date back to Greek and Roman times, and despite the improvements in business and legal processes, they will continue to arise. Modern aspects of contracts to consider include AI-written documents that may contain unforeseen errors or clauses that create future ambiguity.

Many of these are signed as part of service agreements to which businesses can agree at the tick of a box on an app, approving without thorough checking or legal vetting and creating risk.

Similarly, many facilities are starting to operate on smart variable contracts for materials, energy, and other aspects. If these are impacted by global events, such as the current tariff battles, geopolitical upheaval, or local natural disasters, then contracts need to be broad enough to cover such events, ensure pricing doesn’t become unfair, and prevent a gouging issue for building and facilities managers.

Whatever the changes, facilities managers need to keep on top of adjustments in how people, businesses, and the legal landscape operate.

Howie Robleza is a freelance writer interested in tech, legal, and property trends. When she’s not writing, she works in commercial property management.

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