M O P AX. i Y/k (7. annual value of the services is circa E80m. The overall FM service has been worked up into 5 packages.

M O P AX C

riEQUEST FOR DMPC DECISION — DMPCD 201 3-1 33

Title: Procurement Request September 2013

Executive Summary:

Th15 paper requests the approval to initiate procurement for the sub-contracts of Facflities Management (FM), approving the FM Integrator to undertake the procurement on behalf of MOPAC. The estimated annual value of the services is circa E80m. The overall FM service has been worked up into 5 packages. The length of each of the packages is up to 7 years.

Recommendation:

The DMPC is asked to approve KSR as the FM Integrator to initiate procurement for the Facilities

Management packages of services as set out in paragraph 2.], with an e5timated multi-year value of up to f560m.

Deputy Mayor for Policing and Crime

I confirm _{I have considered whether or not I have any personal or prejudicial interest in this matter and}

take the proposed decision in compliance with the Code of Conduct for elected Members of the Authority. Any such interests are recorded below.

The above request has my approval.

Signature Date

i Y/

k (7

DMPCD v3—June 2012

PART I - NON-CONFIDENTIAL FACTS AND ADVICE TO THE DMPC

Decision required — supporting report

1. Introduction and background

1.1 As part of the on-going process of managing contracts and tendering/re-tendering for goods and services Procurement Services identifies contracts which require DMPC approval for either extension or to initiate contract action to tender or re-tender for goods or services.

2. Issues for consideration

2.1 The following items are requested to be considered for approval to initiate procurement action: Estimated Contr&ct Value

Building Engineering Services E16.7m pa.

Buil4 Fabric Maintenance L12.3m p.a.

Soft FM i 142.lmp.a.

Waste f1.Jmp.a.

Qperational Support Epp.a.

2.2 Appendix 1 sets out further detail of the individual elements comprising each of the 5 packages.

3. Financial Comments

3.] The cost of the proposed contracts is estimated at up to LSGOm over a 7 year period, and sufficient budget exists to meet this.

4. Legal Comments

4,1 Procurement Services has confirmed that the procurement process will be conducted in compliance with EU/UK procurement law and the MOPAC governance framework. Legal compliance through DLS will be sought before contract award.

5. Equality Comments

5.1 The Integrator will be required to ensure services support and adhere to the MPS Environmental Policy, MPS Corporate Social Responsibility Strategy and the MPS ‘How We Police Report’ 2011. Bidders will be requested to provide an outline description of how this will be achieved and their solutions will be evaluated as part of the tender process.

5.2 The Integrator model supports the Mayor’s commitment to actively engage small, medium and large businesses which support the Responsible Procurement objectives for competitive and innovative solutions.

6. Background/supporting papers 6.1 None

OMPCO v3—June 2012

Public access to information

Information in this form is subject to the Freedom of Information Act 2000 (FOIA) and other legislation. Part 1 of this form will be made available on the MOPAC website within 1 working day of approval. Any facts/advice/recommendations that should not be made automatically available on request should not be included in Part 1 but instead on the separate Part 2 form. Deferment is only applicable where release before that date would compromise the implementation of the decision being approved.

Is the publication of this form to be deferred? NO If yes, for what reason:

Until what date (if known): Is there a part 2form — No If yes, for what reason:

ORIGINATING OFFICER DECLARATION:

__________

Tick to confirm statement (V)

Head of Unit:

Annabel Cowell has reviewed the request and is satisfied it is correct and consistent

with the MOPAC’s plans and priorities. V

Legal Advice:

The Legal team have been consulted on this proposal.

I Financial Advice:

The Chief Finance Officer has been consulted on this proposal.

I Equalities Advice:

The Equality and Diversity team have been consulted on this proposal on behalf of

the Head of Equalities and Diversity. I

OFFICER APPROVAL

-.;.,‘• .,. .-.; : ..i4f /

1

Chief Operating Officer

I have been consulted about the proposal and confirm that financial, legal and equalities advice has been taken into account in the preparation of this report. I am satisfied that this is an appropriate request to be submitted to the Deputy Mayor for Policing and Crime.

Signature

Date

fl/. oi°

Appendix 1 FACILITIES MANAGEMENT INTEGRATOR: FACILITIES MANAGEMENT SUPPLY CHAIN

PROCUREMENT

Report by Director of Procurement on behalf of the Commissioner Executive Summary

In March 2013, MOPAC approved the award of a collaborative Framework Agreement and Call off Contract to Kellogg, Brown & Root (KBR) Limited to deliver Facilities Management (FM) Integrator Services. This paper seeks approval to grant KBR delegated authority to manage a series of procurement exercises to appoint a FM Supply Chain, on behalf of the MOPAC. KBR Ltd, acting as an Integrator, will procure through a series of OJEU Restricted Procedures, and manage a supply chain of FM Services on behalf of the MOPAC/MPS. FM services will be directly contracted to the MOPAC and will be delivered through second tier supplier contracts with specialist providers. In addition to the procurement and day to day management of Property Services contractors, KBR will provide r fully accredited Computer Aided Facilities Management and Management Information System nterfaced with MPS corporate systems. The primary user interface to KBR will be through their cuntact centre which aligns to the MPS Support Services single contact number. KBR will provire a site based, and a financial audit team who will manage quality of completed works and pa’ments to the supply chain on behalf of the MPS. Forward Works Planning and asset .iaintenance will be coordinated by KBR who will utilise data and enhance the current building management system in order to prioritise and pin point investment to assets, pre-empt failures and drive changes to standards and policies, thus integrating the FM Services within the broader property function.

Current contracts for the delivery of FM services are valued at circa £BOm per annum (depending on the volume of reactive and minor works projects). An optimum value of aggregated requirements over seven years is estimated at £560m, based upon current estate size and portfolio. KBR will apply continuous improvement to the supply chain management, reviewing the supply chain over the next 7 years, ensuring competitive tension and maximum value. It is anticipated that the integrated model will generate substantial efficiencies within the FM Supply Chain and deliver improved service levels. FM delivery savings have been estimated in the region of 7% to 10% of the total FM Supply Chain spend, equating to a potential ESim to £7.3m per annum from April 2014; current estimates by KBR suggest a minimum of 8%. Savings and other benefits will be tracked through contract change control, volumetric reductions and a benefits realisation tracker.

Current contract values can be found in Appendix 1. The Integrator has developed a robust and fit for purpose source plan which details how they will procure and manage the FM Supply Chain ensuring value for money and compliance objectives are met. The outputs of which will be monitored closely by MPS Property and Procurement Services and frequent briefings will be provided to MOPAC.

Between September 2013 and April 2014, six OJEU procurement processes will be managed on behalf of the MOPAC via KBR. All subsequent contract award recommendations over £500,000 will seek the approval of Contracts Board and MOPAC.

A. RECOMMENDATION

1. _{To approve that KBR Ltd, acting as the Integrator, will manage a series of procurement exercises to} appoint a FM supply chain, on behalf of the MOPAC. The services to be procured are listed in Appendix 1.

Appendix I

S. SUPPORTING INFORMATION

1. On 20 October 2011, the Metropolitan Police Authority (MPA) Finance and Resources Committee, now the Mayor’s Office for Policing and Crime (MOPAC), approved the procurement strategy for the delivery of Facilities Management (FM) services through an integrated model, for implementation by April 2014.

2. Approval to initiate the first phase of the FM Integrator procurement exercise was granted by the Deputy Mayor for Policing and Crime on 20 March 2012. A compliant Restricted OJEU procedure was completed and approval to award the Integrator framework agreement and contract to KBR Ltd was received from Contracts Board on 11 February 2013.

3. Consistent with the approved strategy, and in addition to full integration services, the Integrator will act as a first tier supplier providing procurement and supply chain management of the FM Supply Chain. The Integrator is developing a robust, comprehensive and fit for purpose source plan with an objective to deliver value for money services and timely delivery of the requirements.

4. KBR Ltd have now completed a three month ‘mobilisation’ phase. A key deliverable fc KBR Ltd in this period included the development and acceptance by MPS of detailed service delivers plans for implementation in the service development phase (July 2013 - March 2014). One suci service

delivery plan is an iterative source plan (procurement strategy) for each of service lines lisLs1.;.. Appendix 1, The indicative packages listed have been derived through the evaluation of historic data on reactive and planned service costs, frequencies and requirements in order to attract an optimum solution from the supply chain market. Options for ‘handy persons’ at key buildings to resolve and respond to reactive calls (such as changing a light bulb), are being considered within tender documents. The market response will be evaluated from an economic and service perspective to arrive at an optimum and affordable supplier model.

5. The route to market for each of the six high-level packages presented in Appendix 1 will be through a series of OJEU Restricted procedures.

6. The second tier supply chain will be directly contracted to MOPAC and will be delivered through supplier contracts with specialist providers. It is expected that at least some or all of the second tier contracts will be accessible to other contracting organisations, such as the Greater London Authority (CLA), in order to maximise aggregation and collaboration benefits.

7. It is anticipated that the integrated model will generate substantial efficiencies within the FM Supply Chain and deliver improved service levels. FM delivery savings have been estimated in the region of 7% to 10% of the total FM Supply Chain spend, equating to a potential £5.lm to L7.3m per annum from April 2014. KBR have estimated minimum savings of 8% and these are presented in Appendix 1.

8. At contract award stage, it is expected that given the volume of service requirements (as listed in Appendix 1) and the potential number of contracts to be awarded, the process will be consolidated to ensure efficiency of review.

9. In the short term, regular update5 to the MOPAC will be provided at two stages: a. When tenders are received to confirm the delivery of the projected savings. b. Before contracts are awarded.

10. With regards to the contractual position, performance of both the Integrator and second tier supply chain will be measured using appropriate Critical and Key Performance Indicators. There is a defined contractual performance mechanism to provide sanctions and recompense to the MOPAC/MPS should the Integrator, or a second tier contractor, fail to meet the specified service levels:

Appendix 1 a. _{60% of profit margin will be withheld every month until the Integrator can prove that all KPIs}

have been met and service levels have been delivered as contracted

b. _{Upon endorsement by the internal MPS Service Level Governance Board, the 60% balancing} payment is released

c. _{In the event of KPI or service levels continue to fall below contract standards, a ratchet} mechanism is in place to increase this deduction month on month

d. _{For repeat failure, other contract sanctions may apply, these include step in rights (at} Integrator’s cost), claim of any losses incurred and ultimately termination

11. _{In addition, the contract sets out the principles for the governance and relationship management} that MPS requires from the Integrator. Outputs from this governance include performance management reporting and benefits analysis.

12. _{An Intelligent Client Unit led by MPS Property Services, supported by MPS Procurement Services,} will commercially and operationally manage the Integrator Services Contract. Savings and benefits delivered by both the Integrator and second tier supply chain will continuously be benchmarked against both the industry and agreed baseline, and will be tracked through contract change control, volumetric reductions and a benefits realisation tracker. Performance, progress and deliverables of the integrated model and associated contracts will be closely monitored and reported periodically to the MOPAC.

13. _{The management/supervision of the second tier supply chain is the sole responsibility of the} Integrator. Contract KPIs for the Integrator will be aligned/back-to-back with the supply chain contracts.

14. _{There is a gain share mechanism set out in the contract to incentivise the Integrator to identify} efficient, economic and effective working practices, processes and improved technology possibilities with a view to the achievement of on-going reductions in the costs and resources employed by the contracting authority in managing and maintaining the Authority Estate. This is by way of formal business case escalated through the contract governance system.

15. _{The Integrator will be entitled to a share in measurable and auditable net savings made against the} budget which arise as a direct result of the implementation of an approved Cost Saving Initiative that demonstrates and realises actual financial savings to the contracting authority. It is expected that this regime will also be rolled out across the second tier contracts.

C. OTHER ORGANISATIONAL & COMMUNITY IMPLICATIONS Equality and Diversity Impact

The Integrator will be required to ensure services support and adhere to the MPS Environmental Policy, MPS Corporate Social Responsibility Strategy and the MPS ‘How We Police Report’ 2011. Bidders will be requested to provide an outline description of how this will be achieved and their solutions will be evaluated as part of the tender process.

2. _{The Integrator model supports the Mayor’s commitment to actively engage small, medium and large} businesses which support the Responsible Procurement objectives for competitive and innovative solutions.

Financial Implications

1. _{In accordance with Section 8.4 of the MOPAC Scheme of Delegation, the Deputy Mayor must} approve all requests to go out to tender for contracts over L0.Sm. There are no additional financial implications arising from this request at this time. The costs associated with the contracts set out in the report are covered by the budgets set out in the current Business Plan (confidential information

Appendix I is contained in part two of the report). Financial approval will be reassessed at the contract award stage.

Legal Implications

1. In accordance with Section 8.4 of the MOPAC Scheme of Delegation, the Deputy Mayor must approve all requests to go out to tender for contracts over fO.Sm (any confidential information relating to Legal Implications is set out in part two of the report). There are no legal implications at this stage. Procurement Services has confirmed that the procurement process will be conducted in compliance with EU/UK procurement law and the MOPAC governance framework. Legal compliance through DLS will be sought before contract award.

Background/supporting papers

FM Integrator Contracts Board - 11 February 2013

Provision of FMS F&R - 20 October 2011

Appendix 1 Appendix 1

-Indicative packages and list of services to be procured on behalf of the MOPAC/MPS by KBR Ltd Estimated

I

PACKAGE CATEGORIES

_/

SERIAL GROUPS OF PACKAGES

___

Annum Annum CONTENT OF CATEGORIES

STATUTORY INSPECTIONS

1 (2) Inc n BES Inc in BES INSPECTIONS - WATER ANALYSIS

2 — INSPECTIONS REMAINDER

BUILDING ENGINEERING

3 SERVICES (BES) (11) £16,682,000 £1,794,140 LEFTS

ROLLER SHUTTERS, BARRIERS,

DOORS & GATES AND TRAFFIC

4 CALMING & STOPPING SYSTEMS

BOAT HOISTS & AIRCRAFT HANGAF

S DOORS

MECHANICAL & ELECTRICAL

(INCLUDES AUTOMATED TIME RECORDER MAINTENANCE AND

6 _{REPLACEMENT, WHITE GOODS)}

LIGHTNING PROTECTION

_/

7 CONDUCTORS

S FIRE

: SECURITY & COMMUNICATIONS

9 SYSTEMS & EQUIPT

10 _{PUBLIC HEALTH & ENGINEERING}

11 FUEL METERING & PUMPS

12 DIESEL UPS

13 BMS SOFTWARE

BUILDING FABRIC _{GENERAL BUILDING WORKS}

14 MAINTENANCE (BFM) (6) £12,310,000 £1,324,500 INCLUDES RESIDENTIAL SIGNS

STRUCTURAL CIVILS WORKS

15 INCLUDES RESIDENTIAL

16 FLAGS, POLES, MASTS & TOWERS

17 GYM EQUIPT

18 FIRING RANGE & FIRING EQUIPT

19 CUSTODY SUITES

_/

! PERSONNEL HIRE (MAIL

• SCREENING (NEW FM RQT), MAIL SERVICES, PORTERING, RECEPTION

20 SOFT FM (6) £42,115,000 £3,142,588 REPROGRAPHICS, WARDENS

21 SECURITY

22 FURNITURE (NEW FM RQT)

CLEANING & LAUNDRY (INCL LEVIER PICKING OF ROADS,

PATHWAYS, CAR PARKS,

COURTYARDS, PAVED AREAS &

23 HARDSTANDING, CELL BLANKETS)

24 PEST CONTROL

GROUNDS

_/

Appendik I

AREAS & HARDSTANDING

26 WASTE (3) £1,720,000 £120,400 GENERAL WASTE MANAGEMENT

CLINICAL SANITARY & HAZARDOU

27 WASTE

28 RESTRICTED WASTE COLLECTION

OPERATIONAL SUPPORT

GROUP (OSG) - EVENTS

29 MANAGEMENT (3) £5,000,000 £27,500 SPECIAL EVENTS (NEW FM RQT)

MECHANICAL & ELECTRICAL (NEW

30 FM REQUIREMENT)

31 BUILDING

_/

Total 07,827,000 £6,409,128

Projected

Savings