COMMENT
PROCUREMENT PASSAGE
Mark Whittaker, Facilities Management Solutions Consultant at Thomson FM Limited and Chair
of the IWFM, North Region argues that FMs must ensure to create a clear procurement journey
First, a true story. One of my close friends
recently arrived at Liverpool’s John Lennon
airport with her family, ready for a week’s break
at their villa in Spain. They arrived well in advance
by taxi but upon presenting their documents
at the checking-in desk, Claire was horrified to
discover that the passport in front of her was
actually her husband’s, which had expired the
year before. Then came the realisation she had
picked up the wrong passport and that hers was in
her desk draw at home. The error cost her missing
her flight, letting her family travel on ahead, a
sixty-mile roundtrip taxi journey to collect the
correct passport, a re-booked flight and arriving
at their villa over twelve hours a er her family.
The moral of this story, as her husband found out
when Claire arrived at the villa, was to get rid of
your old passport.
The reason I mention this? Well, there is a definite
connection to facilities management procurement
here. Last year I made the career jump from having
worked for a facilities management service provider
for over 10 years, to begin a new role with an FM
consultancy. One of the attractions of the move was
that I am now able to use the experience gained over
that time to work with customers to o er best advice
and to avoid some of the procurement pitfalls I have
seen in the industry all too o„ en. Rather than simply
moan about these issues, I could now have an impact
on positive change and it has been liberating.
The example I used at the start of the article
has resonated with me ever since I heard of what
happened to poor Claire. Imagine, you have spent
a lot of your hard-earned money on a foreign
holiday; perhaps several hundred or indeed several
thousands of pounds. When you arrive at the airport,
ready for your break, would you be careless, or
indeed reckless, enough to be there without a clear
idea of where you are going and how you are going
to get there? Would you be so ill prepared that you
had forgotten to bring your clothes, sun-protection,
currency/cards, holiday insurance and of course,
your passport? Of course not.
So, my central question is this, why do
organisation decide to go to ‘the market’ to procure
their FM services without having taken the time to
prepare for what lies ahead? I have seen far too many
occasions where a procurement exercise has been
delayed and/or run into serious di iculties because
there has been a rush to the market and they have
been ill-prepared from the outset and the situation
14 MARCH 2019
exacerbated when those tendering start asking for
additional information, which is crucial in being able
to provide an accurate cost proposal.
It is now fascinating for me to be working with
organisations and helping them to ensure their
procurement journey is a smooth one. How upto
date is their asset information? I have heard so
many times in the past, “It is about four years old,
as we paid for the incumbent contractor to verify
the assets when they took over the contract.” Too
many organisations then fail to ensure/write it
as a contractual obligation for their contractors
to accurately update this information during the
contract term. Instead they go to the market with
potentially missing information, pay for the new
contractor to repeat the asset verification exercise
and are then asked to consider an increased contract
cost, because additional assets have been found.
One solution is to pay for a consultancy to
undertake consistent and accurate asset
verification and condition surveys, prior to
the issuing of the tender documentation.
Although there is a cost implication, the
payback is that the asset details within
the tender are correct and there is greater
budgetary certainty that the tendered
sums will reflect what is the actual cost to
be paid during the contract term. Aligned
to that is also ensuring asset updating
protocols and reviews on both sides, form
part of the new contract.
Another pitfall which can’t be ignored
is that of obligations under Transfer of
Undertakings (Protection of Employment)
Regulations, or “TUPE” as most of us
refer to it as. Some organisations chose to
absolve any responsibility to provide any
such information and instead, suggest the
tenderers simply contact the incumbent
contractors direct.
The downside of this can be that
obtaining such information may prove
problematic and in the absence of
accurate information on those potentially
eligible to transfer to the new service
provider, one or several of the tenderers
provide a “TUPE neutral” or “Greenfield
bid”, leaving the door potentially open to
renegotiate the costs, once they are fully
aware of the transfer costs. Again, this
can lead to budget forecasting uncertainty
following the tender submission and some
potentially very di icult and protracted negotiations
with all the relevant parties.
Finally, I also advise customers to try and provide
any accurate reactive data within the tender
package, particularly if they are choosing a semi
or fully comprehensive commercial model. I used
to get immensely frustrated to hear a tendering
organisation say that their current service provider
was unable or unwilling to provide them with any
reactive history; this type of data should belong to
the customer and have been provided to them at
frequent intervals during the contract term. It should
form part of a regular performance review and is
also crucial for tenderers to be able to forecast their
potential reactive exposure on the new contract.
One of the many things I am really enjoying in
my new role is that of being able to e ect change
and to address some of the frustrations I have
encountered over the years, like so many of my
peers. Working with customers in clearly defining
and planning their procurement strategy, helping
them to e ectively prepare for the journey,
accompanying them on it and then arriving at
the planned destination, whilst avoiding
delays and the wrong passport(!), is
greatly rewarding.
ADVICE & OPINION