I am an asset verification surveyor and lead manager for asset surveying available for hire as a consultant. But I wanted to discuss today what is Asset Verification and how does this affect a contract.
Firstly I work within the FM industry (Facilities Management) which will often see that maintenance contracts arise and its all based on a set figure which can sometimes be picked out of the sky.
For asset verification though we actually spend time identifying what assets a client owns and the condition they are in. Doesn’t sound so exciting but the fact of the matter is from the information gathered you start to get an accurate value of the contract and the components that need maintaining or replacing.
All in all the asset surveying in the FM industry is a growing enterprise especially with companies looking to extend the life of equipment. Good maintenance will always equal longer life cycle of equipment and poor maintenance will always lead to unexpected and unplanned for breakdowns.
Its part of why I became so passionate about surveying as I can see its long reaching ability to help companies pre-plan upgrades and changes as well as keep on top of things for not only weeks or months but literally years. For the FM company they get a true picture of the value of the contract and both parties get to see the viability of the work and the staff and equipment needed to sustain the contract.
An Asset Verification survey or “AV Survey” for short is generally carried out at the start of a contract changeover period. I wanted to cover the reasons why Asset Verification is so important in a contract.
Most companies on a large scale leave their general maintenance to Facilities Management companies or some other external body who deals with the day to day maintenance of their facilities and equipment. The problem is between the client and the FM company the data is often not updated on a regular basis.
This creates a problem with contract evaluations as they can be under or over valued for maintenance. For example if your equipment was all 50 years old and constantly breaking down but the basis of the contract is written in as “new” you could expect a huge amount of extra repairs during the contract period. The opposite happens if you have replaced a lot of old equipment yet its still on the asset lists as very old. Because the incoming FM company would put additional repair costs to the equipment or even remove it from contract completely until brought up to standard.
So the asset verification process is extremely important in getting the right budget for the right maintenance. But going forward as long as the FM company and client manage their asset lists correctly they should only need minimal updating with changes, repairs etc. as long as its kept up to date!
From a replacement point of view having the asset verification completed often shows a lack of maintenance as well as a lot of equipment in poor condition. These can now be allocated a time period of replacement and expected life before they need replacing.
The reasons I wanted to stress this is that the asset verification is normally coupled with asset condition surveys as they can both and ideally need to be done together. Your paying for a surveyor to assess things are there it doesn’t take much longer to give it a condition code!