FM Support 6 min read

What to Do When Your FM Contractor Goes Insolvent Mid-Contract

FM contractor insolvency is more common than most organisations plan for. Here's a structured approach to protecting your estate, your occupants, and your legal position.

By Mark, Director — B&W INFRA Services

The Risk Nobody Plans For

FM contractor insolvency is a relatively rare event — but when it happens, it can leave organisations managing complex, multi-site estates without mechanical maintenance cover overnight. The consequences range from statutory compliance breaches to genuine safety risks for occupants.

This article sets out a practical response framework based on our direct experience managing emergency FM transitions for public sector clients.

The First 72 Hours

The moment you learn of an insolvency event (or impending one), your priority is triage — not procurement.

Immediate actions:

  • Identify all buildings currently under the insolvent contractor's scope
  • Categorise each by occupier risk and statutory compliance criticality
  • Establish which PPM tasks are due in the next 30 days
  • Contact your insurers to notify them of the change in circumstances
  • Preserve all compliance documentation held by the contractor

Navigating Emergency Procurement

For public sector bodies, the instinct is often to assume that emergency procurement is incompatible with PCR 2015 or the Procurement Act 2023. This is a misconception.

Both frameworks provide for genuinely urgent procurement that bypasses standard competition requirements — provided the urgency is genuine, documented, and not of your own making. A contractor entering administration clearly meets this test.

Key routes:

  • Crown Commercial Services (CCS) frameworks — FM-related lots exist and appointments can often be made within 5–10 working days
  • Direct award under urgency provisions — requires clear justification documentation
  • Interim appointment with competition to follow — appoint immediately, then run a compliant competition for the substantive contract

Protecting Your Legal Position

Document everything. The insolvent contractor's administrators will be looking to maximise recoveries from the estate. You need a clear, contemporaneous record of:

  • What compliance work was outstanding at the point of insolvency
  • What the transition cost you (interim procurement, remediation, etc.)
  • Any failures or safety incidents that occurred during the transition

This documentation supports both your insurance recovery and any contractual claim against the insolvent estate.

How B&W INFRA Can Help

We've managed emergency FM transitions for local authorities and NHS clients — triage, procurement management, interim compliance, and transition reporting. We can mobilise quickly.

Contact us for an initial conversation if you're facing this situation.

FM SupportInsolvencyPublic SectorProcurementCompliance

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