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Next Generation FM Services

Procurement of FM Services

22nd June 2017Presented by Mark French


Introducing Crown Commercial Service (CCS)

• We’re one of the biggest public procurement organisations in Europe and an Executive Agency of the Cabinet Office.

• We lead on developing and implementing the UK’s public sector procurement policy and delivering government’s commercial policy priorities.

• We help organisations across the whole of the public sector find the right commercial solutions for around £12 billion of spend each year.

Commercial

expertise

great value

deals

significant

savings

60% SME

suppliers

bulk

buying

power

We want to help our customers save £2 billion between 2016 and 2020


CCS Operating Scale


CCCCS

Strengthening the UK economy through effective policy delivery

Maximising commercial benefits

Focusing on our customers

CCS Strategy


CCS Procurement Policy

• The commercial policy priorities we currently support include:

• 1/3 of government spend to go to SMEs by 2022

• Increasing the transparency of contract information

• Implementing the prompt payment policy across the supply chain

• 3 million new apprenticeships by 2020

140 courts closed in 2011 further 86 will be closed by the end of

the year

The Government Hubs Programme will reduce the

government estate from around 800 to 200 buildings by 2023

Universal Credit replaces the plethora of benefits into a single

monthly payment

Installing 53 million smart meters to allow gas and electricity usage

to be monitored

23 million A&E attendances in 15/16 – up 22% since 2006

500,000 more school pupils since 2010

Estimated 5.6 million fraud and computer misuse crimes

last year

Investing £1.9 billion to become one of the most digitally advanced

tax administrations in the world

7 new metro mayors with budget and powers to invest

in local economies

Public sector must transform whilst continuing to deliver critical services


CCS Buildings Strategy

• To facilitate a ‘Cradle to Grave’

capability to customers for their

property and FM requirements

• To utilise Buildings Pillar frameworks to

support customers in achieving the

targets set out in the Government

Construction Strategy 2016-20

• To increase efficiencies, reduce costs

and promote better buying behaviours.

Unlock new savings opportunities and

deliver commercial benefits.

HOW CCS BUILDINGS FRAMEWORKS SUPPORT THE

GOVERNMENT PROPERTY LIFECYCLE

Estates Professional Services

Project Management & Full Design Team Services

Building Materials

Construction

Modular Buildings

Facilities Management Services

CAFM / Assurance

Furniture

Utilities

Fuels

Linen & Laundry

Fit-out


CCS Buildings Strategy

• To exploit market capability, knowledge, technology and innovation

• To support the delivery of the Government’s property reform agenda

• To be the provider of choice across the public sector

• To maximise Wider Public Sector growth opportunity


Overview of current FM Services Framework (RM1056)


Summary• RM1056 went live on 28th July 2015 and is broken down into three lots:

• Lot 1: Total Facilities Management consists of a multi-supplier lot incorporating all facilities management services from maintenance and building fabric repairs to security, cleaning, catering and waste management, all delivered by a single supplier.

• Lot 2: Hard Facilities Management consists of a multi-supplier lot incorporating a range of hard services including maintenance and building fabric repairs, mechanical and electrical services and landscaping.

• Lot 3: Soft Facilities Management consists of a multi-supplier lot incorporating a range of soft services including catering, cleaning, security and waste management which support the day to day operation of a property.

• There are ten suppliers on each lot, with some suppliers across multiple lots – 19 suppliers in total


Spend & Benefits• Maximum allowable spend through framework is £4.08bn• 34 separate contracts awarded to date valued £311m• Current estimate of turnover from current pipeline is a further £2.8bn• Average savings circa 20%

Improvements & Lessons Learned

• Changes to TUPE approach were required• TUPE assessment for business cases were too optimistic• Cost model revised on 4 occasions to simplify for customers and suppliers • All standard documents have been revised so that customers to take advantage of all

CCS learning • Participation issues for ‘low value’ business• Poor quality asset information


RM3830 – Project Strategy and Supplier Engagement


The requirement for a new FM Framework● Current framework expires in July 2019. Therefore a need to have a replacement

model in place in advance of the expiry date. The work starts now!● Current arrangement does not cover all services required by all departments● The current model restricts buying options of certain customer organisations● The TFM/Hard FM/ Soft FM lot structure is rigid and doesn’t allow, for example, a

customer who requires a predominantly Soft FM contract, for the supplier to provide any particular Hard FM services that may also be needed.

● Collaboration seen as vital to ensuring future arrangements are fit for all department needs and support strategic growth objectives

● Government increasingly been seen as not a customer of choice by the market● FM a significant spend area in the public sector (circa £3bn per annum) and this

presents an opportunity to support and facilitate efficient buying through centralised vehicles across Government (£16bn total FM spend in Public Sector)


Outline objectives● Build on the performance and successes delivered by RM1056● Real collaboration to ensure a model which meets and leverages market capabilities● Ensure diverse needs of Central Government and Wider Public Sector Customers met● Comprehensive service offering across all FM services inclusive of

○ Hard and Soft Facilities Management Requirements○ Security Requirements○ CAFM / Integrator Requirements○ Linen & Laundry Requirements○ Defence specific FM requirements where needed

● Fit for purpose commercial model (pricing, T&C’s) suitable for large and small packages

● Support to Government's relevant policy agenda● Establish real linkages with other CCS Frameworks, eg Energy, Re-fit, FF&E etc. ● Improve / establish common asset hierarchies ● Improve the handling of TUPE data transfer to facilitate more accurate outturn pricing


Outline objectives● Framework to cover all CG Depts by default unless collaboration cannot be achieved● Simplification* - Pricing, Award Process - move to self service model (*where

appropriate)● Potential for Direct Award for lower value banded services● Innovation & value-add - allow for supplier innovation to be incorporated at Call Off

stage.● Include social value considerations into evaluation models (SME’s, apprentices,

growth)● Deliver and share coherent, transparent and consistent Management Information; ● Exploit market capability and knowledge - SME’s & large vendors● Improve data transparency to enable robust decision making and

performance/contract management; and● Develop and apply common standards to enable benchmarking and consistency of

data.


Category Insights Category Actions

• Current centralised deals are driving significant value

• Customer trends indicate some movement to using integrators to support their Property needs

• Limited opportunity to meet enterprise and growth agenda with current deals

• Lower value needs are not adequately met by the current CCS offer

• CCS products cannot deal with the most complex FM requirements eg, MoD, MoJ

• NEC3 contract has varied feedback amongst customers due to cost and complexity of management

• Some Specialist suppliers locked out of current arrangements.

• Need some sector specific service lots

● Continued focus from CCS in the Workplace category is required to extract further value

● Current CAFM deal to be replaced by a full Integrator solution for customers

● Accelerate the replacement of current CCS products for FM

● Consider the applicability of regional and national delivery capability

● High / Low value FM procurement to be simplified with new pricing model

● Terms to be revisited with Market & Customers

● Consideration of security as a unique lot

● Potential Movement from Hand / Soft / Total to a bundled services offer

● Incorporate Linen & Laundry specialist services into new offer

DRAFT Lot Structure

National FM Services

£8Bn-£11Bn

(includes security, catering, linen & laundry as integrated

service)

Facilities Management Integrator Services

£25M-£75M

Security

£0-£1Bn

Linen & Laundry

£40M-£50M

- 150 Suppliers

- Minimum core service provision

- Crown Marketplace Enabled -

matrix driven approach to final

tender list – geographic, non

core services, capability

- Collaboration between suppliers

- 5 Suppliers

- Full FM Integrator

- 10 Suppliers

- Core Guarding Services

- Non Core Tech Services

- 10 Suppliers

- Collection, Wash, Finish of Laundry

- Generic & NHS specialist items

Catering

£0M-£250M- 20 Suppliers

- Standard & Concession Contract

FM Marketplace – Requirements

FMBundled service provision including “hard” and “soft” services

• Mandatory “core” services (evaluated & priced) with optional “non core” delivery for more specialist

requirements

• Manned guarding, catering & Linen & Laundry as non core service (e.g. where a single integrated

provider is required)

• Simplified pricing structures to support ease of customer access

• Matrix driven approach will sift to a manageable tender list – Crown Marketplace is the enabling

platform

Geographical Capability (County borders)

Non Core / Non Standard Service Provision

Estimated Service Value (ranges)

Terms and Conditions

Direct Award Minimum Threshold

FM Marketplace – Example (simplified) Matrix System

SME 1

SME 2

SME 3

SME 4

Large 5

Large 6

Large 7

Large 8

Large 9

Suppliers 3,5,6,7 invited

to compete for the work

(non-core services

ensures further

competition required)

Suppliers - 10-150 not shown

Scope of Services

Security• Specialist security provision to support access to specialist providers

• Service to include manned guarding as core service

• Security technology service provision as non core service

Integrator• Full Integrator Model

Linen & Laundry• Collection, wash, finish and return of a wide range of generic and health items, including bedding,

towels, clothing, theatre wear, uniforms.

Catering• Provision of standalone catering service

• Standard and concession contracts

Pricing Methodology

Service Type

• Cleaning (NIA)

Building Type

• Warehouse

Location• Greater London

T&C’s• Complex / Non Complex

Output• Bespoke Rate

Principles• Comprehensive Threshold per Building (non core) -

Level set by Customer

• Priced Core Services – held at Framework on core

Unit of Measure for baselined standard service.

• Service Module based on Customer Type (NHS,

School, CG)

• Non Standard Services priced at Call Off based on

deviation from standard pricing

• Non Core priced at Call Off

• Contract uplifts to be set at Framework (admin / mgt)

• All service rates “rolled up” including materials and

consumables

• Direct Delivery / Subcontract same rate

• Allows for Direct Award of Core Services

• Lower threshold (DA) to be determined at bid –

Suppliers must accept over this at risk of exclusion

KPI’s & Performance

• Feedback suggests current model with simplification is appropriate

• - 6% profit at risk, 10 KPI’s, various sub measures

• Review of current model to take place prior to final decision

• Customer self build of KPI model based on CCS templates

TUPE & Mobilisation

TUPE

• TUPE liabilities based on a “TUPE premium” per individual which will value the

variance from standard rates and apply to the annual cost

• True up post Award based on actuals transferred and inaccuracies

• Cost of Change to be included in Year 1

Mobilisation

• Mobilisation to be costed and funded in Year 1

CCS Service Offering

Service Offering

• Strategic advice & guidance on technical build

• Procurement support to Customers

• CCS procurement managed service offer to be defined with CG Customers –

market evidence on high quality procurement operations from CCS

• Procurement support for all WPS Customers

Evaluation

Evaluation Basis

• Price – Core Services

• Quality

• Social Value Balanced Scorecard

• Value Add / Innovation

Next Generation FM Services

Outline timescales


Questions?

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