Multi service contracts is a method used for energy efficiency contracting to add other co-benefits such as lighting, indoor air quality, temperature, noise, esthetical values and well-being issues in the investments.
These co-benefits are included somehow in agreements (in 57% of the answers), but not in a systematical way.
The method brings a system for handling this and are closely related to Energy Performace Contracting (EPC). More knowledge and good practical examples are needed and also guidance how these values can be measured.
In Multi Service Contracting (MSC), the building owner takes a holistic approach to the renovation process, adding value to planning and contracting by including parameters such as indoor climate, maintenance and operation management in energy renovation.
When involved early in shaping the project together with the building owner, an MSC supplier can take responsibility for the performance of the parameters.
The MSC concept also helps determine key performance indicators and methods of monitoring and evaluating this performance, thereby increasing the quality of internal or external services delivered.
Let's understand the problem
Buildings are a key to improving energy efficiency and enhancing decarbonization. Other motivators for energy efficiency include improved indoor climate and the states of maintenance and operation.
A holistic approach to energy renovation also provides the best overall economy since the marginal cost of the simultaneous improving of several parameters is very low.
Energy efficiency already covers a good part of the costs in indoor climate and maintenance improvements, thereby nearly equalising the initial and transaction costs. Furthermore, efficient maintenance and operation are crucial to achieve an energy efficient building.
Such a holistic approach depends on the organizational and budgeting structures. Some public stakeholders have experienced that renovation tasks, including indoor climate and facility management, break down into several activities, each having its individual budget.
So, at least from a financial perspective, a holistic approach stops being truly holistic, additionally complicating the process by erasing roles and responsibilities rather than promoting cooperation between different units in the municipality.
Currently, buildings are renovated with a certain purpose and expected performance, but the average renovation process is neither monitored nor evaluated, nor is its performance followed up.
This situation calls for general re-defining and re-scoping of currently run projects, in order to prevent public stakeholders from experiencing additional unnecessary costs pushed up by ill-designed or ill-implemented building renovation processes.
Among the most complex tasks in renovation are to predict, plan and maintain the performance of energy and indoor climate in an existing building in use.
Yet, this depends on having the right knowledge of the building’s operation, installations and use. Knowledge that is hard to map and accurately maintain over time.
The above discussion clearly shows that there is a need for a new approach to help building owners plan, contract, monitor and evaluate their projects from a holistic point of view, in order to maximize the values of their investments.
One approach for a building owner to achieve such a holistic view is to start cooperating with the constructor from the early stages of the project, and continuing this cooperation into the operation phase.
This gives the constructor a possibility to complement the building owner with necessary resources and competences, both needed to make good decisions throughout the whole renovation process.
Such a holistic approach unlocks enormous potential for improving renovation projects in terms of the optimal multidimensional performance of buildings.
But to fully exploit this potential, both the building owner and the constructor must cooperate from the very beginning until the very end of the renovation project, not losing sight of all the important inner features of the investment.
In a multi service contract (MSC), the building owner signs a contract with a constructor – hereafter named the MSC supplier. The contract focuses on more parameters than just energy, including indoor climate, reducing the backlog of maintenance, and facility management.
The contract also forces both parties to follow-up the performance of buildings after the buildings have been renovated.
Extending the planning phase and involving an MSC supplier from the very beginning of the project increases the chance that the renovation will meet the building owners expectations, thanks to the supplier’s support with resources and competences, and its taking responsibility for the performance of the project.
To understand the MSC model, one needs to note that the final design of the contract depends on the purpose and objectives of the project, since different types of services require different types of solutions.
Targeted at projects with renovation and retrofitting of a larger building portfolio in the existing building stock, the model derives from Energy Performance Contracting (EPC) and strategic partnerships, building on experiences from these two models.
Although developed based on Danish regulations and practice, the model offers a generic frame for multi service contracting. When implemented in a project, it must be adjusted to both the project’s scope and national regulations and practice.