Decision details

Decision:

1. TheDeputy Leader and Cabinet Member for Finance, Corporate and Traded Services to agree to the adoption and implementation of a new Facilities Management Model, with one Hard FM services contract and series of Soft Services Contracts.

2. To delegate authority to the Director of Infrastructure, in consultation with the Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services, to finalise, agree, award and enter into contracts following the procurement process to deliver the new Facilities Management (FM) Model.

Background

The current Total Facilities Management (TFM) contracts with Skanska (West and East Kent) and Amey (Mid Kent) expire in October 2022. The contracts have been in place since October 2014 and have been extended by an additional one year from the initial term of seven years (five years with a two-year extension), to give a total term of eight years.

Options

KCC needs to procure these services to ensure that the Council can continue to safely occupy its buildings after October 2022. Other delivery options have been considered which include:

·    Continuing with a TFM model split by geographic area.

·    Different combinations of disaggregated contracts.

·    Insourcing the provision.

These options have been explored and discussed in detail at the Policy and Resources Cabinet Committee, who endorsed the procurement of the proposed option to appoint a Hard Facilities Services provider and a series of Soft Services Facilities Management Providers.

The proposed decision will support the objectives of “Setting the Course – the Authority’s Interim Strategic Plan” from December 2020. It will do this by ensuring that the facilities management service:

·      Supports services who provide accommodation for vulnerable children and adults.

·      Maximises the opportunities for local businesses to provide services to Kent County Council by use of evaluation criteria that include social value.

·      Provides a suitable working environment for staff delivering front line services to enable them to focus on delivering services to the residents of Kent.

The new facilities management model will include the following contracts:

·         Hard Services - one countywide provider for maintenance and helpdesk services for schools and corporate estate (all property across the Council is held as part of the Corporate Landlord).

·         Catering - one countywide provider for catering, hospitality, water coolers and vending for corporate estate and two countywide providers for catering for schools.

·         Security - one or more countywide provider(s) for manned guarding, key holdings, patrols and vacant sites.

·         Cleaning and Feminine Hygiene - one countywide provider for schools and corporate estate.

·         Waste - one countywide provider for corporate estate and schools.

·         Pest Control - one countywide provider for corporate landlord.

·         Soft Landscaping - one countywide provider for Corporate Landlord.

The new contracts will start in November 2022, to align with the commencement of the Hard FM Services Contract. The procurement programmes will vary dependent upon the procurement route. The mobilisation periods are dependent on the complexity of the service but will generally start between May and August 2022.

Financial Implications

Benchmarking and soft market testing have been carried out as part of the re-procurement process. This external assessment has highlighted that the current TFM contracts benchmarked well below market average costs.

It should be noted that the soft market testing for the estate as it currently stands, has indicated that tender costs are likely to be in excess of the current level of spending and therefore there will be a requirement for management actions to contain the costs, such as reducing the specification and/or the number of properties within the estate.

There is a recognition that KCC’s requirements are likely to change as a result of the COVID-19 pandemic and the consequential estate requirements could potentially, partially mitigate any change in costs. The new contracts are structured so that they can better reflect changes in occupation over time giving greater agility and flexibility.

Current spend via the Total Facilities Management services are circ. £16m per annum revenue and an average of £2.5m per annum capital. This spend will be disaggregated as the new service model is put into place and redistributed between the client function and the hard and soft contracts. The cost of the change in service provision has been included in the Medium-Term Financial Plan.