Building facilities (pt 3)

Facilities managers setting up from scratch first need to consider whether they will be inviting the contractor to provide a total facilities management service (passing all activities including full management responsibilities to them), provision of a number of selected services, provision of a single service or a combination of contract services alongside retained in-house activities.

But, whether we are outsourcing a single function or the full service, the tender process remains basically the same. The main differences are size, complexity of information and the type of company selected for receiving the invitation to tender.

Tender documentation
Having determined the requirement, the first task is to write the specification. We would recommend the use of output specifications in any tender process. They are easier to read and understand than the traditional input specifications and set out clearly what the requirement is. The contractor is also required to explain how he will fulfil the requirement through the use of a methodology and can use his expertise to offer the best deal. Output specifications are usually cheaper (by up to 30 per cent) because the estimator prices the outputs only. They also contain less ambiguity and remove the argument of 'that's not what it says in the specification'. Finally they are more easily measured than input specifications, with Key Performance Indicators (KPI) easily identified.

Clarity needed
The output specification needs to be quite clear. For instance, in a cleaning specification, we use phrases such as: 'there must be no dust on any horizontal surface'.This is clear and measurable.

This type of specification can also be used to form the Service Level Agreement (SLA) with the internal customer. Remember to include your requirements for a customer care approach — an integral part of the monitoring process.

The issued tender documentation also contains the invitation to tender (ITT) and the terms and conditions to be applied to the contract. The ITT is a document that explains the tender process that is being undertaken and the rules that accompany it. It also asks for specific information about the tenderer. A typical ITT includes:

• what is being sought in terms of services and standards
  
• client company values
  
• contract length
  
• administrative systems to be used and meeting dates
  
• the TUPE situation as foreseen
  
• the route for enquiries
  
• the complete set of papers to be included in the tender return
  
•  return address, date and time
  
•  main responsibilities of both parties
  
•  the pricing schedule
  
•  a formal signed statement of acceptance and price
  
•  tenderer's company policies
  
•  management chart
  
•  resources available and personal profiles
  
•  insurances required
  
•  tenderer's company history.

Include a description of the site. You may also provide schedules of installed plant and equipment to be included in maintenance requirements.

The terms and conditions issued within the tender documentation will have been agreed by your company's legal team and are pretty standard, but it is worth remembering that they should reflect the requirement of the specification and the associated risks. If we make them too onerous, costs will rise. Asking for insurance cover in excess of need will mean extra premiums and a more expensive contract.

Beware of tenderers returning different terms and conditions with their tender. It is the last set of terms issued and received that become the legal ones. There is no reason why, in your ITT you cannot state that only your terms will be acceptable.

Depending on the company or European purchasing rules, you may have to use a one or two-stage system of selecting the suppliers that will receive this tender documentation. Some public sector organisations have to use a prequalification stage with an advertisement, usually in the Official Journal of the European Community seeking interested parties. The replies are then evaluated and tenderers selected. Other organisations can simply to select the companies they wish to tender.

There are three options for consideration in tender returns. They are:

• the one envelope system where all information is returned in one envelope
  
• the two envelope return where price is returned separately and that envelope only opened if the tender return is acceptable
  
• the three envelope system where a third envelope contains innovative ideas which may in turn offer a different price.

Having issued the tender, it is important to invite the contractors to a briefing meeting at which further information can be offered. The briefing meeting is usually followed by a tour of the premises so the contractors can familiarise themselves. Be careful with questions during this tour because answers will not be heard by all parties. Some facilities managers refuse to answer questions on tour but will receive them afterwards.

If there are many buildings to visit then it will be necessary to arrange dates and times but consider just one date for each building to save your time attending interminable visits.

It is then time to sit back and wait for the returns. Questions will still be asked by the contractors, and some organisations insist that they are delivered in paper format to ensure there is no misunderstanding. Answers are usually then offered to all parties to ensure they all have the same information. Here it is worth considering not issuing to all any answers that are in response to innovative ideas.

When the tenders are returned we need to undertake an evaluation process. Make sure each return is complete, the requirement has been understood and the proposed delivery matches need. To do this it is worth creating a form detailing the requirements sought in the tender return. Each requirement can then be given a weighted score reflecting its importance, and an actual score reflecting the quality and completeness of the return. This results in a technical score thereby placing the returns in a quality order.

Making a decision
You may wish to separate your measurements into commercial, financial and technical content.

Once the quality order has been determined it has to be considered alongside price and a judgement made as to what is acceptable. The price may well change the quality order. We then recommend that the top three are asked to attend a 'beauty parade' at which they will be asked to make a presentation detailing how they propose to deliver the service and why they should be awarded the contract.

The contract team should be required to include within it the person who will be directly responsible for contract delivery and who will be seen on site more than any other management person.

The presentation is then followed by a question and answer session to clarify any final issues (many of your questions can be prepared before the meeting). Remember that during this session it is important to make subjective judgements on whether or not you will feel comfortable working with this contractor and, in particular, the contract manager over the period of the contract.

You are then in a position to select the lucky contractor for final negotiation on exactly how the contract will work and on minor changes. These negotiations will include:

• the consideration of innovative ideas
  
• the performance measurement system to be used, how it will be implemented and who will participate
  
• the need for customer care, and information regarding the internal customer and expectations
  
• the regular meeting arrangements
  
• the escalation procedures
  
• the rights and duties of both parties
  
• the finalisation of prices.

At the same time it will be necessary to inform the other tenderers of their failure.

Mobilisation
The facilities manager should arrange a mobilisation meeting with the successful contractor at which a mobilisation programme will be drawn up and agreed. One of the requirements may be to ensure that all TUPE conditions are met. This will include full consultation with any transferring staff and this activity must be built in.

The programme should include key activities such as site appraisal and familiarisation, consideration of any contracts transferring to the new contractor, provision of any relevant existing records and key dates on which either the facilities manager or the contractor have to deliver sign-off or data.

The facilities manager should consider how the new appointment is to be announced and the level of impact he or she wants the contractor to have with the organisation.

Performance monitoring
Many good contractors have performance monitoring systems already. The facilities manager should evaluate them to decide whether to use these or to request new ones more suited to the particular contract.

Agreement must be achieved on the indicators, together with the method of applying them and who will carry out the assessments. The measuring must be carried out monthly and the scores made available for the monthly review meeting. Any shortfalls or over-delivery should be addressed and rectified to the satisfaction of all concerned.

Many contracts fail through poor measurement and monitoring, which leads to service quality gaps appearing. If these are not closed the contractor and the facilities manager lose credibility with the customer.