FM Procurement Good Practice

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Presentation delivered at The Guardian Public Procurement Show, 14th June 2011.
Feel free to contact me for more information.

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  • A presentation by John Bowen at The Guardian Public Procurement Show 14th June 2011This is a one day seminar condensed into 20 minutes, so we are going to have to keep much of the session at a high level. Visit the BIFM stand C38 just round to your left for details of membership and what the Institute has to offer.Recommended reading:BIFM Good Practice GuideTotal Facilities Management, Atkins & BrooksContact Details:John Bowenhelp@gulfhaven.co.uk+44 (0)751 60 40 737Slide format © BIFM Ltd 2011. Slide content and notes © Gulfhaven Ltd 2011
  • Sometimes you will be doing the buying yourself and sometimes you may have to work with a buying team.My aim here is to share with you some experiences to help you see what the buying side is all about and how good practice can help make your life easier.The key aim of good procurement is to work towards supporting the business objective and strategy. If all parts of the team are not joined up in this aim then you will fail.Slide format © BIFM Ltd 2011. Slide content and notes © Gulfhaven Ltd 2011
  • Broadly these are the six main steps that a procurement project will go through. Some of them form iterative loops that you may need to go around once or twice, but time spent up front will pay back well later.There is some blurring of the edges on these stages, and the Public Sector have the Public Contracts regulations to consider whereby there are predefined minima for certain stages.This is really a circle in that the contract will eventually need to be renewed and you are back to the start. The exit strategy issue is therefore important and is discussed in more detail when we talk about the Specification.Implementation/mobilisation are not covered here as they really fall outside of the procurement brief in this context, but would be an area that the procurement team should have a view of in terms of good practice category management principles.Slide format © BIFM Ltd 2011. Slide content and notes © Gulfhaven Ltd 2011
  • A basic tool that you should always use, even if your company does not insist on it (say for minor works) because it helps you define your goals, how you will measure them and sets out what success will look like.You should argue out at least three options, one of which will be to carry on as now (ie; extend the existing contract, keep the work in house etc), another to tender the work on the same basis as now and the third to do something different. If you have other options, use them, but there three should at least get you thinking about what you are able to do.Try and cost these out and use tools like DCF and NPV to see what the financial; impact is over time. Think about the impact of capital cost vs revenue.It may seem onerous to do this sort of thing when you don’t have to, but it is good practice for when you do and they are good general business skills to acquire.Establish who the decision makers are – good governanceSlide format © BIFM Ltd 2011. Slide content and notes © Gulfhaven Ltd 2011
  • There are two key aspects to this, The first is to understand what the market has to offer; what new developments are out there that could help you, who’s hot and who’s not.The second is around where you fit in the market place; who are the right sized suppliers for your level of demand.The internet is a good source of information to start you off, but do find time to call suppliers and get them to come in and see you. Slide format © BIFM Ltd 2011. Slide content and notes © Gulfhaven Ltd 2011
  • In the Business Case we have set out What & Why. Now we use the strategy to set out how, who and when.How are you going to tackle the project? In the public sector you will be EU process driven, but even there you have choices of approach. In the private sector you have an even freer choice.Options include;Contract extensionNon competitive contractCompetitive contractSet out the timetable, establish who you need and when, set diary dates and adjust your timetable as necessary.List roles & responsibilities along with deliverables and make sure that the critical path is visible, again, this is good governance.Keep records of what is achieved against your targets to help future planning.Slide format © BIFM Ltd 2011. Slide content and notes © Gulfhaven Ltd 2011
  • Input vsOutputThink forward more than backwardTell the market the story in terms of what you need to be able to achieve.Use the business case to drive KPI/SLAThink about how you will evaluate responses to the ITT (& PQQ)Include an exit strategy in the Spec. It will help both you and the supplier understand how things will be concluded and provides the trigger for the next time round the procurement loop.The Spec will be the heart of the ITT. Use it to tell the story of how the suppliers can help you meet your business goals.Slide format © BIFM Ltd 2011. Slide content and notes © Gulfhaven Ltd 2011
  • You may want to pre-qualify suppliers as part of this stage, and may well have to do this in the public sector. The earlier you do it the better and, in some cases, you can do it before the Spec is complete.Remember that the criteria to selecting suppliers and awarding the contract are different. Think about how you want the responses back and how they will be opened and recorded. If you have been involved with the Spec then you should not be part of the opening and recording process – Probity rules.Within the responses, establish who the decision makers are for the suppliers; Hawksfordvs Stella, a recent case where it was found that Mistake did apply and that the premise that one individual was not empowered to make decisions was not accepted by the court. The issue being argued was worth £5M.Understand what you are being offered; alternative terms, licences, warranties etcSlide format © BIFM Ltd 2011. Slide content and notes © Gulfhaven Ltd 2011
  • Decision should be objective – you have to be able to justify it, and also justify your criteria; recent case involving the NI Regional Development Board where 40% of marks were awarded for quality and the logic behind this was challenged.Keep selection criteria out of it; this is about the awardUse the agreed matrix for marking and keep records – stay with your planBe prepared to de-brief unsuccessful biddersMobilisation stage will follow, so make sure you discuss this thoroughly in the suppler meetingsClosing down any existing contracts will need to be harmonised and there may be handover issues, including TUPE. Slide format © BIFM Ltd 2011. Slide content and notes © Gulfhaven Ltd 2011
  • Slide format © BIFM Ltd 2011. Slide content and notes © Gulfhaven Ltd 2011
  • FM Procurement Good Practice

    1. 1. John Bowen<br />FM Procurement<br />A Good Practice Tale<br />
    2. 2. FM Procurement<br />Procurement, Purchasing – what’s it all about?<br />
    3. 3. FM Procurement<br />One – The Business Case<br />Two – Evaluating the Market<br />Three – Strategy<br />Four – Specification<br />Five – The Tender Process<br />Six – Awarding the Contract<br />
    4. 4. FM Procurement<br />The Business Case<br />
    5. 5. FM Procurement<br />Evaluating the Market<br />
    6. 6. FM Procurement<br />The Strategy<br />
    7. 7. FM Procurement<br />The Specification<br />
    8. 8. FM Procurement<br />The Tender Process<br />
    9. 9. FM Procurement<br />Contract Award<br />
    10. 10. FM Procurement<br />Questions<br />

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