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.
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.
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.
Decision type: Key
Reason Key: Expenditure or savings of more than £1m;
Decision status: Recommendations Approved
Division affected: (All Division);
Notice of proposed decision first published: 29/10/2021
Anticipated restriction: Part exempt - View reasons
Explanation of anticipated restriction:
Information relating to the financial or business affairs of any particular person (including the authority holding that information)
Decision due: Not before 29th Nov 2021 by Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services
Reason: in order that the proposed decision can be published for a minimum of 28 days, in accordance with statutory requirements
Lead member: Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services
Lead director: Rebecca Spore
Department: Strategic & Corporate Services
Contact: Karen Ripley, Special Projects Manager 03000 413457 Email: firstname.lastname@example.org.
Reports providing an update on progress have been presented at various Policy and Resources Cabinet Committee meetings since March 2020.
The proposed decision was discussed and endorsed by the committtee on 24 March 2022.
Financial implications: The information on the Financial Implications is too long to include here. However, it is set out in full as part of the 'Description'.
Legal implications: KCC will be required to enter into one or a number of legal contracts that will be executed under seal (where £1m or greater in value) or signed by all parties (where under £1m in value). External legal advisors have been appointed who will advise on legal implications and contract drafting including any TUPE implications in relation to the change in the service delivery model.
Equalities implications: Equalities Impact Assessment (EqIA) has been drafted and will be updated throughout the procurement process. No issues have been identified at this stage for EqIA, but this will be reviewed as the project continues.