Scrutiny Presentation - Leicestershirepolitics.leics.gov.uk/documents/s94342/Hard and Soft FM... · Scrutiny Presentation July 2014 ... • Joint function delivering with Supply Chain

Operational Property Services

Operational Property & FM Commercial Traded Services

Scrutiny Presentation

July 2014

Agen

da Ite

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Service Delivery

Delivery of Services

8


Service Structure

Soft FMProperty Portfolio Hard FM

Roderick O’Connor

Assistant Director

Customer Services & Operations

Country-side Services

Sites

Development

Beaumanor Hall

MATU

Reception

Service

Front of House

Central

Print

Graham Read

Corporate Facilities & Operations Manager

Soft FMHard FM

9


Our Traded Functions

Soft Facilities Management Hard Facilities Management

The Service Provision of out-sourced Building

Cleaning, Grounds Maintenance,

Security, Waste Management, and Pest

Control. Delivery of in-house Site

Development service Premises Officers,

Postal services and Transport and

Logistics.

Provision of maintenance support

services, Minor and Major capital

works full turn key packages,

Regulatory compliance, Building

condition and energy surveys.

Property Services helpdesk and

inspection and clerk of works

functions.

Product Total Soft Facilities Management

Package provided either as a whole or

individual elements.

Total Hard Facilities Management

Package provided either as a whole or

individual elements.

Hard FM – Supporting the building fabric

Soft FM – The provision of support services

(BIFM, 2014)

Hard and Soft FM

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In-House

• Retention of Postal Services, Premises

Officers, Minor Building Maintenance,

Landscape Construction, Regulatory

Compliance

• Market Tested and Evaluated

• Cost Effective Services, off-setting

costs

Service Delivery Model

LCC Managed Outsourced Contract

• OJEU Tendered Service Provision

• Managed SCAPE Contracts

• Flexible call-off arrangements

Joint Partnership Working

• Joint function delivering with Supply Chain Partners

• Joint contract provision via framework contracts

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Procurement

Procurement of services

12


Procurement Soft FM

Procurement

Both LCC’s Hard and Soft FM supply chains have been procured through OJEU compliant processes

in conjunction with our Corporate Procurement Team.

Our Soft FM outsourced portfolio was tendered in 2008 with the option for either a holistic FM or

single service provider. Final evaluation of a shortlist of 5 national suppliers concluded that on the

basis of financial value and quality the preferred option for LCC was to be to award in single service

lots.

Lot Supplier Service Scope

Building Cleaning Servest Ltd Internal and external

cleaning including

specialist works

Grounds

Maintenance

John O’Conner Ltd Soft landscape

maintenance

Security Servest Ltd Man guarding, mobile

patrols a out of hours

callout

Waste Management

(commercial)

Servest Ltd Collection of waste

and recycling rom LCC

offices

13


Procurement Hard FM

The Hard FM Framework are broken down into 3 areas:-

Major Works £750,000 and above – procurement via SCAPE Contract

Minor Works £50,000 - £750,000 – LCC frameworks have been put

into place that are effective from 1st May 2014 for 4 years.

Roofs – Pitched and Flat – PPQ and ITT advertised via Source Leicestershire

Windows / Glazing – PPQ and ITT advertised via Source Leicestershire

Demolition – PPQ and ITT advertised via Source Leicestershire

General Building - OJEU process ran by ESPO PPQ and ITT process

Reactive Maintenance £0-£50,000 – LCC frameworks / select lists currently

being procured to be put into place for 1st April 2015 for 4 years.

General Building - OJEU process PPQ and ITT advertised via Source Leicestershire

Electrical - OJEU process PPQ and ITT advertised via Source Leicestershire

Mechanical - OJEU process PPQ and ITT advertised via Source Leicestershire

Roofing - OJEU process PPQ and ITT advertised via Source Leicestershire

Air conditioning – Select list advertised via Source Leicestershire

Glazing – Select list advertised via Source Leicestershire

Drainage – Select list advertised via Source Leicestershire

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Procurement Key Principles

Key principles of the procurement and ongoing management of FM

contracts:-

Encouragement of inward investment within Leicestershire – FM is a ‘people based’

industry with both our suppliers of Hard and Soft FM predominantly being located

locally and employing local people.

The structured specialist frameworks of the Hard FM portfolio allow opportunity for

local SME’s to tender for works. Advertised through Source Leicestershire.

�

�

There is an evident culture of financial challenge within all contracts which continues to

provide value for money for LCC and contribute to the MTFS. Examples include inflation

freeze and up front payment for negotiated discounts

�

Contracts are operated to nationally published DEFRA Government Buying Standards

to ensure compliancy with environmental practices�

Innovated to save – We actively engage with our contractors to look at ways of driving

efficiency saving throughout the contract lifecycle. �

Change - Our contracts were specified to allow flexibility and continue to offer the LCC

tailored services to the need of its own requirement and changing market conditions�

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Our Customers

Academies District Councils

SchoolsLeicestershire Fire and Rescue Service

Leicestershire ConstabularyParish Councils

Leicester City CouncilCharitable trusts

Private industry ESPO

Leicestershire Probation Service

NHS

Other Educational Establishments

Public

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Our Customers

Leic

est

er

Cit

y

Co

un

cil

Sch

oo

ls a

nd

Aca

de

mie

s

Po

lice

Dis

tric

t C

ou

nci

ls

Leic

s

Fir

e a

nd

Re

scu

e

Se

rvic

e

Pri

va

teS

ect

or

an

d m

em

be

rs o

f

the

pu

bli

c

Pa

rish

Co

un

cils

Ch

ari

tab

le a

nd

Vo

lun

tary

Se

cto

r

Leic

s

Pro

ba

tio

n

Se

rvic

e

Soft FM � � � � � � � � �

Hard FM � � � � � �

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Partnership Working

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North West Leicestershire

Registrars co-lo at NWLDC

LCC Touchdown (Snibston)

LCC Offices (High Street)

FM contracts

Charnwood

Registrars, Coroners, Touchdown all co-

lo at CBC offices

Proposed wider co-lo of locality offices

with JCP and CBC (other options

available)

Mountsorrel depot

Melton

Shared offices (Parkside); NHS, MBC, LCC,

JCP, CAB, Probation

Oadby and Wigston

LCC offices (Basset Street)

LCC host CAB, registrars and NHS staff

LCC Touchdown (Abington House)

Harborough

Shared offices (Symington);

LCC, HDC, JCP, CAB, Touchdown

Hinckley

Shared offices;

Hinckley Hub;

HBBC, LCC, JCP, AtkinsTouchdown, HBBC,

Registrars

FM Contracts

Blaby

Croft depot

Romulus Court (offices,

multiagency resiliency

service)

County Hall

LCC offices (Basset Street)

LCC host NHS (University Hosp Leicester,

Public Health England, Unison, Fire Service

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Hard FM – Contracts within Leicestershire

North West

Leicester

Hard FM 41

Charnwood

Hard FM 24

Melton

Hard FM 27

Oadby and

Wigston

Hard FM 15

Harborough

Hard FM 21

Hinckley

Hard FM 26

Blaby

Hard FM 21

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Soft FM – Contracts within Leicestershire

North West

Leicester

Grounds 108

Cleaning 35

Hard FM

Charnwood

Grounds 66

Cleaning 38

Hard FM

Melton

Grounds19

Cleaning 6

Hard FM

Oadby and

Wigston

Grounds 30

Cleaning 18

Hard FM

Harborough

Grounds 49

Cleaning 27

Hard FM

Hinckley

Grounds 56

Cleaning 27

Hard FM

Blaby

Grounds 47

Cleaning 26

Hard FM

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Quality Of Services….

Quality Of Services

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Quality Of Services - Statistics

Figure 4.1: Existing Customer Survey

response profile

Supplier Area % Poor % Satisfactory or

better

%Good or

very good

All Soft FM

Overall quality 2.5% 97.5% 72.5%

Value for money 0% 100% 63%

Responsiveness 0% 100% 75%

Table 7: Customer Survey results – Our Contract Management (LCC)

During 2013 a survey was

conducted on our Soft

FM services from our

existing customers. Figure 4.1

Identifies the different

market segments.

The first survey below was

conducted on the quality of

the LCC’s management

of outsourced Soft FM

contracts

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Quality Of Services for existing customers

Supplier Area % Poor %

Satisfactor

y or better

%Good or

very good

Grounds

Maintenance

Overall quality 7% 93% 68%



Customer fit 9% 91% 51%

Table 5: Customer Survey results – FM Grounds Contract

Supplier Area % Poor %

Satisfactory

or better

%Good or

very good

Building Cleaning Overall quality 0% 100% 72.5%




Specialist Cleaning Overall quality 0% 100% 65%




Table 6: Customer Survey results – FM Cleaning Contract

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Financial benchmarking

Work the Leicestershire Pound

Following the migration of the School Food

Support waste into the LCC Corporate Waste

Contract, the service achieved a £35K per annum

savings and the percentages as below.

Provider Percentage Saving

Veolia 38% saving by using LCC contract

Shanks 37% saving by using LCC contract

SITA 27% saving by using LCC contract

Harborough District 22% saving by using LCC contract

North West Leicestershire 15% saving by using LCC contract

Veolia 38% saving by using LCC contract

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Quality Of Services – Financial benchmarking

Qualitiy: ‘Our Mangement’ results

Organisation Price (max

30%)

Leicestershire County Council (John O’Conner Ltd)

25.40%

MITIE Landscapes Limited 25.00%

Norse Commercial Services

Ltd

24.90%

Enterprise Managed Services

Limited

18.10%

Mark Walker (Grounds

Maintenance) Ltd

17.20%

Vale Contract Services Ltd 16.40%

Glendale Grounds

Management Ltd

16.4

Mercury Alliance 14.5

Organisation Price (Max

30%)

Leicestershire County Council(John O’Conner Ltd)

25.40%

MITIE Landscapes Limited 25.00%

Quadron Services Limited 21.60%

G. Burley & Sons Ltd. 16.80%

Gavin Jones Ltd 16.60%

Vale Contract Services Ltd 16.40%

Glendale Grounds

Management Ltd

16.40%

Mercury Alliance 14.50%

Kent County Council

(Landscape Services)

13.40%

Table 1 – East Midlands Pro5 Grounds Maintenance Costs

Table 2 – West Midlands Pro5 Grounds Maintenance costs

The following tables are

extracted from the ESPO Pro5

Grounds Maintenance Contract

Contractors were assessed in terms

of who offered the better cost value

with highest mark awarded to the

lowest priced contractor. LCC Soft

FM achieved the best value results

for both regions.

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Quality Of Services – Financial benchmarking

Soft FM cleaning services are benchmarked against the national

Association for Public Sector Excellence (APSE) KPI P1-01, which illustrates the cost

per square metre per annum. Graph 3 below shows LCC Soft FM costs for office

spaces to be below the national average for public sector.

Soft FM Cleaning Costs comparison per sq metre against national (APSE) rates

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Quality Of Services - Standards

Have ISO 9001 (Quality Systems) as a condition of contract

Contractors are required to :-

�

� Have ISO 14001 (Environmental) or equivalent as a condition of contract in line with our

environmental policy

� Evidence safe systems of work (ISO 18001, Occupational Health and Safety) or equivalent

� Be member of a relevant Trade association (BIFM, BICs, LANTRA)

� Demonstrate and evidence equalities good practice

�Be of good financial standing which is audited by Leicestershire County Council’s financial

services team.

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Financial Performance

Financial Performance

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Hard FM – Financials

£-

£200,000

£400,000

£600,000

£800,000

£1,000,000

£1,200,000

2012 /13 2013 /14 2014 / 15

Inco

me

£

Hard FM Traded Fees income

current and forecast

Building Maintenance and Repair

0

10

20

30

40

2013-14 2014-15 2015-16

Traded works income totalCapital Works, Schools Maintenance Fund

Million

Current Position

Hard FM employs professional staff who are chartered status and high levels of experience

despite the whole-sale conversion of Leicestershire schools to academies they have retained high

level of existing customers.

Challenges

Private sector offering property / FM services and schools converting to Academy status.

Strategy

Build on the success with academies, improvement by in-housing and forming structured

operational FM team including both Hard and Soft FM to increase trading opportunities.

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Soft FM – Financials

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2010/11 2011/12 2012/13 2013/14

Soft FM Contracts Traded Income

£3,200,000.00

£3,400,000.00

£3,600,000.00

£3,800,000.00

£4,000,000.00

2010-11 2011-12 2012-13 2013-14

Soft FM Total Contract Value

Current PositionSoft FM offers an extensive range of services including Cleaning, Grounds Maintenance, Security, Waste,

Specialist Cleaning, Pest Control, Play Inspection, Washroom, Housekeeping and Premises Support.

ChallengesExternal competition for FM services is extremely high and with academies convergences increasing,

customers will be provided with opportunities to migrate away from LCC Traded Services.

Strategy Increased financial benefits can be gained by self-delivering certain Soft FM functions and this combined

with greater diversification is intended to increase performance.

Soft FM

£1.59m

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Future Initiatives

•Process simplification and streamlining

•Combined approach with other business units

•Consolidation of commercial activities

•Centralising of Tendering function

•Identification of Target Markets and intelligence gathering

•Customer engagement to understand their future requirements.

•Combined approach with other business units

•Partnership agreements with other public sector bodies and link to

transformation programme (ie Health and Districts)

•Operational Property have targeted an additional increase of traded

income of £408k in the next two years

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Customer Intelligence Gathering and Recognition System

GIGaR – What will it do?

Currently in development stage, the CIGaR system will

enable us improve existing customer understanding, their

requirements and our relationship with them. This is a

enhancement to our current systems allowing the

consolidation of multi-service & departmental customer

data.

Key functionality

� Storage of all customer profiles

� Analysis of the customers requirement (Leads)

� Recording of our current contract agreement and

their real-time value to LCC

� Versatility to report across multiple criteria

� Tracking of contract lifecycle

� Reporting of KPI’s including contract uptake,

marketing activities and trends

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Traded Services – Continuous Improvements

•Corporate Savings –

• £321k of Soft FM Savings achieved via inflation freeze and up-front

payments

• Staff - Up -skilling of in-house staff to reduce contractor

expenditure and achieve savings

• £215k budget reduction following Hard FM

framework tendering

•Environmental initiatives

•Process improvement saving 54,000Lts of water per annum.

•Environmental KPI in each contract to drive down and energy usage in

service delivery

Challenge

ImplementReview

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Next Steps?

Enhance the service provision and scope

Carry on with continuous improvement

Consolidate with more

Form alternative

�

�

�

�

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Documents

Scrutiny Presentation - Leicestershirepolitics.leics.gov.uk/documents/s94342/Hard and Soft FM... · Scrutiny Presentation July 2014 ... • Joint function delivering with Supply Chain