Monitoring building operation and maintenance contracts

PurposeThe purpose of the paper is to study the use of management tools and their costs for monitoring building operation and maintenance (O&M) service contracts.Design/methodology/approachThe management tools usable for monitoring building O&M contracts were reviewed, with their characteristics highlighted and compared. A series of face‐to‐face interviews with practitioners looking after building O&M contracts was conducted to collect empirical information, followed by data analysis and discussion of the results.FindingsThe paper finds that using balanced scorecard or benchmarking to monitor building O&M contracts was unpopular. The use of customer satisfaction survey was rather common. The cost for monitoring contracts through performance review meeting and O&M audit was measured. It tended to reduce in relative amount with larger scale of contracts.Research limitations/implicationsMore research is needed to study the effect of factors, including propriety of contract, complexity of work, contractual relationship, capability and quality of the contract and management teams on contract monitoring effort. Further works may take a similar approach of the study to investigate other transaction cost elements.Practical implicationsThe cost amounts for implementing the management tools inform practitioners about their significance relative to the amounts for procuring O&M services. How to make effective use of management tools to monitor O&M contracts should be investigated.Originality/valueIt has been demonstrated how to measure the cost for using management tools to monitor building O&M contracts. The reviewed characteristics of the management tools and the unveiled amounts of contract monitoring cost are useful information to O&M practitioners.