total facilities management contract overview

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L I N KTransforming Total Facilities Management

Total Facilities Management Contract Overview

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What is TFM?

Building Management

Building Security

Mail Services

Repairs & Maintenance

Statutory Compliance

Pest ControlCatering

FM HelpdeskLandscaping Reception Services

Capital projects

Print and reprographicsCleaning

Space Management

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The Procurement Process

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Pre October 2013

• The 3 Councils ran their own Facilities Management (FM) services

• Mix of outsourced services and in-house services – different models used

• No set service level agreements or responses times

• Inconsistent service delivery and compliance

• Duplication of roles

• No economies of scale or market rates – in house resource not market value

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Consolidate as a Tri-Borough Service

• Decision taken to consolidate services on a Tri-Borough basis

• Outsourcing of all services to one Total Facilities Management provider

• Set up an in-house team to oversee contract, monitor performance and ensure compliance with the contract and with legal obligations

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TFM Objectives

Minimum £2M pa savings net of transformation costs High

Savings reduction beyond target in longer term High

Lower Total Cost of Ownership High

Statutory Compliance – enhanced audit trail and accountability High

Development of Intelligent Client Function (now LINK) High

Process efficiency and standardisation of processes. Medium

Visibility of cost and operating data and Management Information Medium

Scalability – flexing the workforce in relation to scope of estate Medium

Growth opportunity and commercialisation of service delivery Medium

Finance and delivery risk transfer to supply chain Low

No dilution from current levels of service Low

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What has been achieved?

Commercial • c£150m fixed price 10 (+3) years contract• 34% savings over pre October 13 baseline• Delivery of the project objectives (specification, governance etc)• No dilution from current service levels

Controls • Robust performance management framework to ensure quality• £2m at risk v £200k reward per annum• Benchmarking and market testing provisions to ensure VFM

Risk Management • H&S compliant estate• Assured procurement (Audit report)• Better visibility and auditability of data

Culture • Real Tri Borough change• Collaborative working in Local Authority & supplier• New single client function• Emphasis on standarding FM services across the estate

Future • Framework with potential income• Potential for further efficiency savings• Community projects• Additional energy savings

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Risk & Mitigation

• Single Client is preferred

• Bidding tool for London

• Increases share value

• Guaranteed returns

• LINK collaborates with bidder

• Controlled entry

• Performance Management System

• Payment Mechanism

• Strong LINK commercial skills

• Predicted 30% by Technical Advisors

• All bidders priced within range

• Consistent to benchmark

Price is too low

Service quality drops

Bidders View

Framework not

successful

The Contract & Contract Management

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Lump Sum, Fully Inclusive Risk TransferIn

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2,0

00

Sit

es100 Different ServicesService Matrix

Out of Scope

- Buildings outside ofservice matrix

-Services marked‘No’ on theservice matrix

- Enhancement Projects

- Projects that are >£250k

- Estatemanagement

In Scope (within lump sum)

- Services at buildings listed in the service matrix

- To the output specification in the contract

- Unlimited reactive repairs

- All planned preventative maintenance

- Forward Maintenance Plan (FMP)

- Building management services under the remit of the FM

In Scope (But variable)

- Additional ad-hocservices

- Print recharges

- Hospitality

- Postage

- Couriers

- Existing 3rd

party contracts

- Stationery

- Projects that are <£250k and non-FMP

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Building Categories

# DescriptionCat 1 These buildings are predominantly offices e.g. Town Halls and Civic Centres. They will receive the full range of FM

services including cleaning, repairs and maintenance, security and catering.Full building management services via the FM to include management of contractors, fire management and any customer focused services as part of the building ‘owner’.The only services excluded are the ‘no’s’ on the matrix. There may be items not listed that are part of Amey’sremit such as blinds and solar panels.

Cat 2 Operational buildings’ such as hostels and residential homes will receive cleaning,repairs, maintenance and safety services. Full building management services via the FM to include management of contractors, fire management and any customer focused services in liaison with the appointed premises controller.The only services excluded are the ‘no’s’ on the matrix. There may be items not listed that are part of Amey’sremit such as blinds and solar panels.

Cat 3 A diverse cross section of buildings where Amey will carry out cleaning, essential repairs and safety services to ensure the buildings remain structurally sound and meet safety regulations.No overall building management responsibilities except those specifically detailed.Only those services with a ‘yes’ on the matrix are included.

Cat 4 In these buildings which tend to be vacant or commercial properties, we may provide cleaning, security and safety services.No overall building management responsibilities except those specifically detailed.Only those services with a ‘yes’ on the matrix are included.

Cat 5 In these buildings (mainly schools) Amey provide cleaning, postal services, meter reading andsome maintenance.No overall building management responsibilities except those specifically detailed in the Amey agreement with the school.

The categories reflect the level of service within a building

- Cat 1 – FM services and building management in a corporate building

-Cat 2 – Full FM services and building management (in liaison with Premises

Controller)

-Cat 3 & 4 – Limited FM services (in line with the service matrix as Landlord duties) to the investment portfolio

- Cat 5 – Schools as detailed in the Service Matrix

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Financial ProcessesLearning

& Growth Customer

Val

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for

Mo

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Fin

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Per

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Co

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Hea

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Performance Management - Key Performance Indicators

11% 4% 7% 10% 7% 7% 10% 3% 10% 7% 5% 4% 25%

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Revised Balanced ScorecardIn

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Applying the Scorecard Result

Under Performance Over Performance

Balanced Scorecard Result

Potential Performance Deduction

95.00% – 99.99% -0%

90.00% – 94.99% -20%

85.00% – 89.99% -50%

80.00% – 84.99% -70%

75.00% – 79.99% -100%

<75% Critical Service Failure

Balanced Scorecard Result

Potential Performance Reward

95.00% – 99.99% +0%

100.00% – 104.99% +5%

105.00% – 110.00% +10%

£2,000,000 at risk per annum

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Benchmarking

• Amey shall benchmark the services against services provided in similar contracts every 3 years

• Amey must set out the names of proposed Benchmark Organisations and methodology in the Benchmarking Plan which the Councils must approve

• If the TFM contract costs are higher than the benchmark costs the price will be reduced by 80% of the difference

• No provision in the contract for the price to be increased automatically following a benchmarking exercise

8 January 2015

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Market Testing

• Market Testing takes place if the parties cannot agree on a suitable price adjustment or the Council does not regard the benchmarking exercise has been robust

• Amey has to market test the Market Tested Services by putting them out to tender

• Amey bears the cost of the Market Testing exercise

8 January 2015

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Variation & Change Control

• Changes will be actioned through the Change Control mechanism (Schedule 13)

• Councils can amend or introduce new KPIs and OPIs during the contract period

– the proposal will have been approved by the Service Operations Board having considered any impact on the change prepared by the Service Provider

8 January 2015

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Framework Agreement

• All London authorities, and schools, outside of the Tri-boroughs are in scope

• Live from 1 October 2013

• Lasts for 4 years and the term can be coterminous with Tri-borough contract

• The TFM services in the catalogue can be called off through an agreement between the authority and Amey

• Contains provisions that allow the Tri-boroughs to review a call-off

• The Framework Agreement contains a mechanism for determining the price paid by the authority

8 January 2015

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The Client

• RBKC are the lead borough for the TFM contract

• RBKC Procedures will be used to manage the LINK & Amey

• Backed off by the S113 agreement to other two boroughs

• Governance by Strategic Partnership Board and Operations Board

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The LINK

• Designed to control, manage and inform

• The link between the supplier and the Councils

• Intention is to be data rich, enabling the LINK to take informed decisions

• The supplier has its own management team directing the operational service delivery to the estate

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TFM Governance Structure

Governance

Tri Borough

Governance

Operations Board

Service Partner LINK

Strategy (Partnership)

Board

• Setting Tri-borough Objectives

• Approval and decision making for Tri Borough

• Alignment to Tri-borough objectives

• Forward thinking• Planning and leading

• Operational guidance• Conduit for stakeholders• Delivery

• As defined in the S113 Agreement

• Borough Cabinet s ultimate decision making bodies

• Borough Directors of Property

• Amey Senior Management• Head of LINK and Amey

Account Director

• Head of LINK and Amey Account Director

• LINK and Amey Operational Managers

• Tri-borough reps as app

RoleMembership

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Delegation of Authority

Amey

WCC Service Delivery RBKC Service Delivery LBHF Service Delivery

S113 Agreement

RBKC LBHF WCC

FM & FM

related H&S

FM & FM

related H&S FM & FM

related H&S

Director of Corporate

Property

CEO

RBKC

Head of Tri-B Facilities

Management

total facilities management contract overview

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