Finance and Investment Committee Tuesday 26 May hours

Transcription

1 Meeting Finance and Investment Committee Date and Time Tuesday 26 May hours Location Pacific Quay Title of Paper Facilities Management Item Number 12.1 Presented By Susan Mitchell Recommendation to Members For Approval Appendix Attached: No PURPOSE To advise members of our collaborative approach to the procurement of hard facilities management services for SPA property. 1 BACKGROUND 1.1 Hard facilities management (FM) involves the provision of planned and reactive maintenance services for properties, including mechanical and electrical services, planned and reactive maintenance and minor works. 1.2 Existing hard FM provision across SPA properties includes a mixture of term maintenance contracts for a single aspect of facilities maintenance, (e.g. lifts, water quality, portable appliance testing, fire alarm systems, etc); service level agreements with Local Authorities, and single source facilities management contracts covering a wide range of tasks and services. 1.3 Members will recall discussion that took place in January at Finance & Investment Committee and in February at the full meeting of the Authority in relation to the extension of the existing contract for former SPSA properties. At that time, Police Scotland indicated that work was ongoing to address the full landscape of hard FM arrangements across the country, in line with agreed procurement strategy, and that this update would be brought forward in May to ensure members were aware of the proposed approach. 1.4 Over the past year, we have been researching the best way forward to address the complex landscape of facilities management across all SPA properties. Through our engagement with the emergency services collaboration group, we identified that SFRS have a similar landscape of contractual arrangements in place and there was clear scope to collaborate in the procurement of a new arrangement.

2 2 FURTHER DETAIL ON REPORT TOPIC 2.1 It is proposed to consolidate the numerous existing hard FM contracts into a new model, covering all SPA and SFRS properties throughout Scotland. 2.2 The requirement is to provide the PS and SFRS with a high quality, responsive service which improves service delivery, statutory compliance, and customer feedback and maximises benefits. It aims to provide a consistent national service and generate savings. 2.3 A number of options to deliver against this requirement have been analysed and evaluated by both Police Scotland and SFRS. This supports the recommendation that the services should, firstly, tender together and, secondly, appoint a single national provider. This would maximise benefits, both financial and non-financial. Both organisations have similarly matched requirements and objectives. Feasibility 2.4 The supply market has been consulted for their capacity and capability. The market is limited in Scotland with regard to the management of a consolidation of facilities services. Yet, market interest is substantial due to the size and profile of this opportunity. Views from the market support a single national contract. 2.5 There already exists some experience within Police Scotland of a very successful consolidated contract model in one of the legacy forces and confidence in the proposed approach is high. 2.6 External research demonstrates that large consolidated service facilities contracts are likely to be the future of facilities management in the UK, with all English and Welsh central government, migrating to large consolidated facilities management contracts, commencing in The Scottish Government (SG) core estate is already running this model and demonstrated material savings in its last tender appointment. 2.7 Police Scotland and SFRS are in agreement that it would be efficient and effective to proceed to European Competition for a single national contract for the delivery of hard FM services for a period of five years with a two year extension via collaborative procurement for a single national commercial partner. 2.8 The shared services function within the Scottish Government Procurement and Commercial Directorate, which delivers support to several organisations across the central government sector in Scotland has agreed to lead on the procurement exercise. Wider collaboration 2.9 The initial concept behind this procurement proposal was a three-way collaboration which included the Scottish Ambulance Service (SAS), however from early work it became apparent that current business

3 requirements for SAS meant that contractual timescales could not be aligned on this occasion. SAS remains committed to exploring collaborative opportunities and we will keep this process under review for future opportunities Work was also undertaken, facilitated by the Scottish Futures Trust, to explore wider collaboration across the Scottish Government Justice family. Through a series of workshop sessions it was established that potential Justice partners in the Scottish Court Service and the Crown Office and Procurator Fiscal Service, being longer established bodies, had access to a more mature data set and had a wider set of business requirements. As such it was agreed that they would not join this collaboration at this stage. Both bodies have offered support from their previous experiences in this field and are interested in exploring further collaborative opportunities, possibly at the next iteration of the contract, when our business requirements can be more closely aligned External research has demonstrated that the plan for the future of facilities management in the longer term, in both services, is likely to lie in a larger collaboration of public sector bodies. A five year term would give this project the opportunity to continue to collaborate with Crown and Courts in 2020 for a second generation contract. Governance 2.12 A joint Project Board has been established, with representation from all Police Scotland, SFRS, Scottish Futures Trust and Scottish Government, supported by a joint User Intelligence Group (UIG) with representation from these bodies and other interested partners. A single Project Manager has been appointed, from Police Scotland, who will chair the UIG and report to the Project Board Procurement of the contract will be in line with existing standing orders for both SFRS and Police Scotland. As with all contracts of this nature and scale, procurement will take the form of an OJEU tender and approval will be sought from Finance & Investment Committee to recommend to SPA full Board for approval of the contract award. Commodity strategy 2.14 A commodity strategy is a procurement plan which is developed by crossfunctional team, in this case the UIG. A number of options to deliver this business requirement were developed through the UIG and seeking the views of a broad range of FM suppliers. These were subsequently considered by the joint Project Board and User Intelligence Group. The option selected is to tender for a single supplier collaborative contract Services within scope have been identified and are limited to hard facilities management. It was considered possible that the partnership approach may be extended to soft services at some future stage when business requirements for both services are more fully understood.

4 2.16 Early work by all partners has given significant focus to enabling opportunities for Small and Medium-sized Enterprises (SMEs). Taking account of the business requirement for consistency across Scotland, it is considered that this can best be achieved through seeking local delivery units within the supply chain, which can meet response times, with fair wage and fair payment commitments The joint Project Board has proposed that the OJEU restricted tender process should be adopted, and the contract duration should be for an initial five year period, with scope for a two year extension if necessary/appropriate at that time Timelines remain indicative at this stage while partner approvals are sought, however it is anticipated that the process will take around 12 months from Contract Notice until the new contract is live. Anticipated benefits 2.19 The following anticipated benefits have been identified from adopting this approach: i. significant financial savings working with partner organisations will give economies of scale and significant market interest is anticipated for this contract ii. iii. iv. rationalisation of the existing Police Scotland contractual position and streamlining of associated processes consistent and improved service standards strategic partnership scope to build relationships and capacity for working together, as well as sharing best practice between organisations (this project is regarded as a pathfinder for collaboration of this nature), and v. collection of robust and consistent management information for future contract development. 3 FINANCIAL IMPLICATIONS 3.1 The immediate financial implications are a fee leveraged by procurement service of approximately 80k including VAT, split between the two organisations. 3.2 Financial savings are yet to be fully confirmed but initial estimates expect budget savings are substantial. The Estates department, repairs and maintenance budget is circa 6m. 3.3 The size and profile of the collaborative contract makes it attractive for tenders to offer added value options. Access to investment funding for spend-to-save schemes, for example.

5 3.4 Authority to proceed to award the contract will be sought in a post tender evaluation report through the Finance and Investment Committee and the Scottish Police Authority Board. 4 PERSONNEL IMPLICATIONS 4.1 Work previously undertaken on Estate department restructuring has identified the need to consolidate contracts in a new model. 4.2 There are no implications for Police staff currently employed in manual FM posts. They will continue to be employed on their current terms and conditions. 5 LEGAL IMPLICATIONS 5.1 Collaborative procurement by its nature introduces legal complexities for partner organisations. These will be managed collectively where appropriate and within each partner organisation where necessary. It is proposed that PS become the lead Authority and liability and payment becomes disaggregated to the SFRS in a separate legal agreement which is being drafted. 6 REPUTATIONAL IMPLICATIONS 6.1 A major benefit in this proposed contract will be the adoption of a best practice approach to facilities management. There will be a consequent increase in reputation from adopting a more efficient, compliant and auditable approach. 6.2 The proposed new model will be best practice in Scotland by demonstrating procurement reform, the benefits of collaboration and shared services, and the benefits of working in partnership with a commercial provider. 7 SOCIAL IMPLICATIONS 7.1 This large public service contract will benefit Scottish SMEs. All national contractors would be reliant on SMEs for delivery of this service. The national contractor will be subject to constant monitoring on the employment of SMEs, both pre and post contract. This is consistent with our intent as set out in the procurement strategy. Incentives, such as prompt payment conditions to subcontractors, will be dictated by the contract. 7.2 This contract will benefit the Scottish facilities construction industry and the communities its supports, by a programme of work over a substantial period of time. Apprenticeship schemes and other training opportunities will be encouraged as part of the contract.

6 8 EQUALITIES IMPLICATIONS 8.1 The project has been assessed for its equality issues, in line with Scottish Government s Sustainable Procurement sustainability tests. An Equality Impact Assessment will be conducted for this procurement exercise. RECOMMENDATIONS Members are requested to: Endorse the approach being adopted by Police Scotland with SFRS for the collaborative procurement of Hard FM services. Note that the post tender evaluation report and proposed contract award will proceed to the Finance and Investment Committee and the Scottish Police Authority Board for approval in line with existing standing orders.