Agenda item

1. A 5-year contract (with an option to extend for a further 2 years) to Interserve (Facilities Management) Ltd for the delivery of the Facilities Management Services (FMS) be awarded.
2. That authority is delegated to the Corporate Director Finance & Operations in consultation with the Portfolio Holder, Finance & Resources, to initiate the 2 year extension period subject to satisfactory financial and operational performance, and that any extension is within budget.
3. That authority is delegated to the Portfolio Holder, Finance & Resources to extend the scope of this contract to include the buildings/assets in Phase 2 (Berkhamsted Civic Centre, Tring Town Hall and Hemel Hempstead Old Town Hall), subject to the delivery of a business case demonstrating the benefits of such inclusion, and that any extension of scope is within budget.
4. A report back to Cabinet to seek approval to extend the scope of this contract to include the buildings/assets in Phase 3 (any other buildings/assets where it was felt it may be beneficial to be included), subject to the delivery of a business case demonstrating the benefits of such inclusion, and that any extension of scope is within budget was approved.

 

Decision

 

1. A 5-year contract (with an option to extend for a further 2 years) to Interserve (Facilities Management) Ltd for the delivery of the Facilities Management Services (FMS) be awarded.
2. That authority is delegated to the Corporate Director Finance & Operations in consultation with the Portfolio Holder, Finance & Resources, to initiate the 2 year extension period subject to satisfactory financial and operational performance, and that any extension is within budget.
3. That authority is delegated to the Portfolio Holder, Finance & Resources to extend the scope of this contract to include the buildings/assets in Phase 2 (Berkhamsted Civic Centre, Tring Town Hall and Hemel Hempstead Old Town Hall), subject to the delivery of a business case demonstrating the benefits of such inclusion, and that any extension of scope is within budget.
4. A report back to Cabinet to seek approval to extend the scope of this contract to include the buildings/assets in Phase 3 (any other buildings/assets where it was felt it may be beneficial to be included), subject to the delivery of a business case demonstrating the benefits of such inclusion, and that any extension of scope is within budget was approved.

 

Reason for Decision

 

To seek Cabinet approval to award a contract for the delivery of Facilities Management Services.

 

Implications

 

Financial

 

The cost of the FMS is made up from 2 elements.

 

·         The first element is the lump sum charges and these are the known costs for services that will be constantly delivered each month (porterage services, security, cleaning etc.).

·         The second element is the ‘New Works’ process, these costs are unknown and will be delivered on an ad-hoc basis as required (building repairs over £500 (comprehensive liability threshold), specialist waste disposal, locksmith services etc.).

 

Due to the second element of the costs we are unable to provide a precise contract value, but can confirm that the cost of the FMS contract will be covered from within existing budgets.

 

Value for Money

 

The award of this contract from the Crown Commercial Services (CCS) framework agreement will have the following implications on value for money;

 

·         A consistent approach to specifications, a common set of service level requirements and standards, a standard set of terms and conditions, scope and key performance indicators.

·         Addresses sustainability issues by incorporating the Government Buying Standards, energy efficiency, water consumption and waste minimisation.

·         Reduced fees for poor performance meaning that poor performance will result in reduced payments to the suppliers.

·         Value for money is gained through better management of cost and performance data.

·         NEC3 Term Services Contract is the form of contract to be used for call-off contracts; it includes 10 key performance indicators including one for innovation/gain share.

·         NEC3 Term Services Contract is the form of contract to be used for call-off contracts; it includes 10 key performance indicators including one for innovation/gain share.

·         Savings in the region of 15% through better buying, leverage, aggregation and standardisation.

 

Savings in the region of 15% through better buying, leverage, aggregation and standardisation.

 

Risk Implications

 

The awarding of this contract has been carried out in full compliance with the Council’s procurement rules and as a consequence the risk of any challenge from an unsuccessful bidder is very low.

 

With regards to the risks associated with the delivery of the FMS contract, these have been addressed through the evaluation of the bids for the ‘Mobilisation’ period and for the ongoing ‘Operational Delivery’ of the contracts.

 

Appropriate risk management methodologies are built into the contract and the monitoring of performance to ensure that risks are identified and managed throughout the duration of the contract.   

 

Additional quality assurance was requested from Cushman and Wakefield and Eversheds to review the specification and drafting of the contract.

 

Health & Safety Implications

Health & Safety is of paramount importance for the delivery of the FMS contract.

Appropriate Health & Safety requirements have built into the contract and the monitoring of performance to ensure that Health & Safety issues are identified and managed throughout the duration of the contract.   

 

Community Impact Assessment

 

A Community Impact Assessment is not required for the award of the FMS contract.

 

Corporate Objectives

 

The delivery of the FMS at the Forum supports the delivery of an efficient and modern Council which is one of the priorities of the Council’s vision.

 

Monitoring Officer/S.151 Officer Comments

 

Monitoring Officer:  

 

The proposed award of contract follows a regulated procurement process which was procured via the CCS Framework Agreement.

The procurement process has been quality assured through support on the technical specification by Cushman and Wakefield and legal support (contract drafting) by Eversheds Solicitors.   Accordingly, the Monitoring Officer is satisfied that the contract can be awarded.

 

Deputy S.151 Officer

 

The lump sum charges can be met from within existing approved base budgets. There is also sufficient budget for a prudent estimate of “new works”. Any additional works that incur significant costs would be subject to normal financial control measures which would include monitoring and reporting and if necessary seeking additional approvals either in year or through the budget setting process.

 

Advice

 

Councillor Elliot explained that Facilities Management had been through a vigorous process and review. Interserve had been chosen from the two BIDS received for the contract and they were a well known firm. The next stages would look into other civic sites.

 

Councillor Marshall raised disappointed that only two bids had been received.

B Hosier said this ‘further competition’ was undertaken utilising Lot 1 of the Crown Commercial Framework Agreement for Total Asset Management.

Lot 1 of this framework agreement has 10 Service Providers on it and all 10 were invited to submit a return tender.

A number of the bidders informed us that they were already involved in a number of ‘further competitions’ from this framework agreement and declined the opportunity to tender.

Bidders need to invest quite a lot of resource when tendering, and if bidders were to tender for all opportunities that arise under this framework, their chances of being successful could be as low as 1 in 10 which may not be that appealing to the bidders.

Bidders tend to be selective on which tenders they focus on, and although the Council only received 2 bids, the proposals that were submitted clearly demonstrated their commitment to winning this contract.

To date, 8 contracts have been awarded from this framework agreement totalling £400M, although the contract value of the Council’s requirements are nowhere near this figure, the service that will be delivered is as important to us as any of the clients.

 

Councillor Harden asked for a further explanation of phase 2 and 3 and the expected timescales.

 

B Hosier explained that the current focus was on Facilities Management for the Forum. The full scope of the contract needed to be included at the initial stages or it could not be included in the contract. There are currently no timescales for Tring and Berkhamsted sites, but there was a recommendation to return to a future Cabinet meeting to decide any additional sites to be included. B Hosier explained that as the contract was for a maximum duration of 7 years (5 years initially with an option to extend for a further 2 years), he would recommend that the Council look at the option of the other sites in the early years of the contract to take full advantage over the duration of the contract.

 

Councillor Griffiths asked who would decide on the controls for the new works process. For example who would decide the level of maintenance required?

B Hosier explained that a comprehensive liability threshold had been set at £500, any work that fell below this threshold would be paid for by the Contractor and any work that was requested above this threshold would need to be signed off by the Contract Manager. .

 

Voting

 

None.