In FMJ's regular monthly column, our team of FM experts answer your
Cont. p22
20 JUNE 2019
questions about the world of facilities management
PUBLIC SECTOR CLIENT’S
VIEW
CHARLES SIDDONS,
HEAD OF OPERATIONS (SOUTH)
NHS PROPERTY SERVICES LTD
The March 2019 ‘Please Procure
Responsibly’ report from the
Reform think tank identifies
several common areas of failure
and weakness in public sector
procurement together with a
series of recommendations to
rectify these. These include
improved central government
support for contracting bodies,
improved training and better
transparency of contracts
awarded. In addition, the report
recommends the mandatory
implementation of ‘statements
of responsibilities’ and
‘responsibilities maps’ which
should be modelled on the
Financial Conduct Authority’s
example, with the aim of ensuring
all managers and directors along
the supply chain are aware of their
responsibilities and accountabilities in
the event of failure.
Risk Management is a theme running throughout
the report and, as the report makes clear, risk should
be considered well before any procurement itself starts
and should link to the
fundamental question of
why outsourcing is being
considered in the first place
and what is hoped to be
achieved by the process.
Considerations of outsourcing
should link to how this will
support the organisation’s delivery
of its purpose, goals and objectives.
This should include an appropriate risk
based assessment of delivery options including
a ‘make or buy’ review.
In recognising the potential benefits of outsourcing,
procuring bodies have to recognise the potential risks
and rewards of doing so; risks to service delivery, cost
or quality for example do not disappear by passing the
responsibility to someone else. Engagement with potential
suppliers and other client agencies at this early stage will
help to determine the potential market appetite and how
similar arrangements have performed elsewhere which
can help prevent significant issues manifesting themselves
later and ensure appropriate reward mechanisms are put
in place.
The approach to risk management should be undertaken
thoroughly, ideally with dedicated risk identification
sessions to confirm potential risks, measure their potential
significance, agree how each can be assessed, monitored
and controlled. A risk profile should be created to pull
into one place all of the risk information and to enable
consideration to be given to the ‘total’ risk portfolio. At the
pre-procurement stage this will help confirm important
items such as which risks can reasonably transferred to a
supplier, the level of contact variability and incentive
mechanisms.
A structured best practice approach should be
taken to any procurement itself (such as the
RICS Procurement of Facilities Management
professional statement and guidance note, or
the Government Procurement Playbook) and
suitably trained and skilled people have to
be involved throughout the procurement and
contract management life cycle.
All outsoucing arrangements should
have e ective governance in place, including
measurement, reporting and meeting structures.
Questions in relation to contingency planning should
be common as well those relating to any changes within
the supplier organisation that could a ect the contract
in the short and longer term. This includes questions on
the supplier business strategy, financial performance, key
FM CLINIC
The recent advice from
the Government’s
Reform think tank
included a range of
recommendations to
improve outsourcing
outcomes. This
includes “Statements of
responsibility” – i.e. measures
to make sure that civil servants
are aware of their responsibilities.
When negotiating private or public sector
outsourced FM contracts what sort of questions
should clients ask their contractors to help ensure
that both parties understand the risk and rewards?
Charles Siddons
ADVICE & OPINION
In recognising the
potential Eenefi ts oI
outsourcing, procuring bodies
have to recognise the potential
UisNs and UeZaUds oI doinJ soƌ
– Charles Siddons