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Next Gen CCS FM Framework – the one FM opportunity you cannot miss!

Baskar Sundaram
Baskar Sundaram

As the market prepares itself for the government’s next-gen FM CCS framework, Baskar Sundaram, Founding Director of Baachu, helps providers ascertain if the framework is the way forward for them

Most of you may already have registered for the upcoming ‘Crown Commercial Services’ (CCS) framework for FM procurement. Even if you haven’t, we will help you understand the framework – what it holds for you, and the industry at large. If you haven’t already registered for updates and event invitations relating to the CCS framework, e-mail nextgenfm@crowncommercial.gov.uk.

Before we delve deeper into the framework, it is vital that you ask yourself a few questions to ascertain why you may want to explore this opportunity:

  • Are you already on the existing CCS FM framework?
  • Are you a private FM provider looking to expand into the public sector?
  • Is the UK public sector an important market for you?
  • Are your existing public-sector clients looking to take the CCS route for contract renewals in the future?

If the answer to most of these questions is yes, then read on to understand what the new framework entails and how to ensure that you are well placed to be a part of the public sector FM supply chain of the future.

CCS – background

In recent years, the UK government has focused its efforts on reshaping public procurement through creation of centralised procurement vehicles, among other policy changes. The sector is thus witnessing a shift in procurement policies, guidelines and practices. As the existing CCS framework agreement ‘RM1056’ is due to expire in 2019, CCS has initiated groundwork to shape up its successor. With the new framework, CCS is aiming to address key concerns with the current framework, including – suppliers not viewing the government as a customer of choice, buyers concerned with inadequate competition and restrictions on buying options, etc.

The upcoming CCS framework is expected to cover c.60% of public sector contracts in the years to come. It will be used by public sector bodies such as central government departments, local authorities, schools, NHS, etc.

So, if your organisation’s focus is the public sector market, the time is right for you to understand and prepare for this opportunity.

The next-gen CCS framework

The new version will build on the performance and successes delivered by RM1056, while addressing the diverse needs of Central Government and WPS. The government is introducing changes based on market feedback to ensure the new procurement route is easy to use, encourages collaboration, doesn’t restrict buying options for customers and creates opportunity for greater localised procurement.

It will be split into two phases:

  • Phase One (Bundled FM Services) – OJEU 1 Jan 2018 and Award in Apr 2018

Phase one will have a total of 160-180 suppliers across: lower tier (100), middle tier (50) and upper tier (25)

Lot 1: FM Marketplace

  • Lot 1a: £0 – £7M; 75 – 100 suppliers
  • Lot 1b: £7 – £50M; 50 suppliers
  • Lot 1c: £50M+; 25 suppliers

Lot 2: Defence Specific

  • 5 suppliers
  • 5 reserve
  • Phase Two (Specialist Services) – OJEU 2 Apr 2018 and Award in Aug 2018
  • Integrated services (5 suppliers): £25m – £75m
  • Security services (10 suppliers): £0bn – £1bn
  • Linen and Laundry (10 suppliers): £40m – £50m
  • Catering services (20 suppliers): up to £250m
  • Contract Duration: Up to 7 years, maximum 3 year extensions
  • Weightages: 50%/50% quality/cost; +/- 30% at Customer discretion
  • Locations: 63 regions – suppliers can select one or all regions; during tender process, suppliers will be selected and placed into lots and must demonstrate delivery capabilities in the given region
  • Mandatory financial suitability assessment for all participants prior to progression on to the Framework

CCS Next Gen FM – What’s new?

Among a host of other improvisations, the framework will feature a fit-for-purpose commercial model suitable for large and small packages, improved handling of TUPE data transfer, revised service lot categorisation, and direct award for simple, low value requirements (mandatory services only) on tenders up to £1 Mn.

The framework will operate electronically – through a bespoke portal, buyers will be presented with a number of mandatory stage-gates designed to filter out non-compliant suppliers.

Framework design and structure – key highlights

Scope of Services Pricing Methodology
·      Comprehensive FM service offering for:

o  Hard and Soft FM Requirements

o  Security Requirements

o  CAFM / Integrator Requirements

o  Linen & Laundry Requirements

o  Defence specific FM requirements where needed

·      Mandatory (Core) and Non-Mandatory (non-core) services

·      Anticipated pricing models are fixed price, target cost and Reimbursable (schedule of rates)

·      Set Rates on a variable Unit of Measure basis will form basis for all pricing models, e.g. GIA, NIA, weight, time, per item etc.

·      Rates will be rolled up, all-inclusive prices e.g. labour, materials, consumables etc.

·      1% CCS levy on all mini competitions which will need to be built in at pricing stage

 

KPIs & Performance TUPE
·      Fewer, more meaningful KPIs related to service delivery

·      10 core KPI’s with additional level 2 KPIs

·      Variable at risk element at customer discretion

·      Three approaches, based on differing levels of liability transfer:

o  TUPE Fixed Percentage tendered at framework (for direct award), based on a full risk transfer of all liability (up to a threshold) applied to the contract value at award

o  TUPE risk premium based on actual TUPE data

o  TUPE fixed premium based on an annual monetary value applied to the contract

 

The framework will also support government’s policy agenda for SMEs, apprentices and growth, by expanding the evaluation criteria to include social value and innovation considerations – for up to 5% of the overall quality scores.

Buyers will be compelled to make the most of CCS framework, as the Central Governments puts greater emphasis on procuring centrally.

CCS is the way forward

The framework is set to provide the right impetus and opportunities to local providers and SMEs for greater engagement in public sector procurement. The focus on social value, inclusive economy and innovation in the bidding proposition, is likely to encourage greater supplier coordination and collaboration. Large FM players will thus be on the lookout for skilled/experienced local players to find ways to impact local economy and demonstrate social value. As providers will have to demonstrate the ability to deliver the mandatory services across lots, looking for the right partners will be the key to advancing in the bidding process.

As the government targets an estimated £2 Bn of annual spend through the new framework, established FM providers risk losing out their market share to competitors if they are not on the framework.

The final framework would include 100 lower tier, 50 middle tier and 25 upper tier suppliers, hence, the need for collaboration will benefit considerable number of FM products and services providers. Furthermore, suppliers of chemicals, laundry, pest control, waste management, hygiene, etc. – will also have the opportunity to demonstrate their innovation led proposition to large FM players.

Amidst economic challenges and socio-political issues such as Brexit and migration, suppliers must ascertain if missing out on the public-sector FM opportunities is in the best interest of their organisation over the long term.

CCS Framework – Call for action to providers

As the new framework’s OJEU notice date closes in, it is crucial for FM providers to decide their stance on the framework and chalk out necessary next steps.

If you are an established provider with significant public sector presence, keep in mind that increased government emphasis on central procurement will drive buyers to make greater use of the framework in the coming years. Further, the focus on SME and local provider inclusion will necessitate you to look for the right partner organisations for bidding – incorporating social value and innovation in your bidding proposition. As the government targets an estimated £2 Bn of annual spend through the new framework, established public FM providers risk losing out their market share to competitors if they are not on the framework.

Baachu View

Baachu team estimates sizeable upcoming opportunities in the UK public sector FM market over the next three years, with upwards of 800 contracts worth over £9 Bn in TCV will be outsourced by 2020. To enable FM providers to gain a bigger pie of the public FM market, we have built a comprehensive database of upcoming public-sector FM opportunities over the next five years, across sectors. How many these will be coming through CCS framework? We don’t know but you can view these opportunities for free at www.baachurain.com.

On the other hand, if a commoditised, low margin and competitive public sector FM market is not your focus, either because you’ve had a bad experience with the existing CCS framework, you can explore over 2000 private sector outsourced FM projects at www.baachurain.com.

For more details around how we can help you proceed CCS in the most effective way, register at our website http://baachu.co.uk/next-gen-ccs-fm-framework-the-fm-opportunity-you-are-looking-for-2018/

Reach out to us at baskar@baachu.com, and we will be glad to support your specific growth requirements, just as we assist numerous local, national and international FM companies.

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