ProCirc

Hard Facility Management Services

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Introduction

The City of Edinburgh Council tendered for two Hard Facility Management (FM) Services Delivery Partners (covering North & South of city boundaries) to support the Council in delivering its commercial property repair and maintenance programme, for its over 660 operational buildings and non-operational assets. The aggregate value of the contracts is estimated to be a maximum of £18m per annum.

Each contract is for 7 years with the option to extend for a further 3 years subject to performance reviews. Contracts were awarded to MITIE Technical Facilities Management Ltd and Skanska Construction UK Ltd in November 2021.

The Hard FM Services will cover planned and reactive maintenance, statutory compliance, minor works and area wide specific programmes. The scope includes, but is not limited to, services listed below.

  • Fabric elements: roofs and roof drainage, floors and floor finishes, stairs, ceilings, external and internal doors, external walls and finishes, windows, internal walls/ partitions and finishes, external pipework, sanitary services, fixtures and fittings, plumbing, signage, fixed furniture and fittings, external circulation routes including playgrounds and hardstandings, external furniture, external drainage, external signage, and boundary walls, fences and gates.

  • Mechanical & Electrical elements: heating and domestic hot water boilers, oil fired boilers, gas fired boilers, chimney sweeping, feed/ expansion tanks, induced draught fans, combustion air paths, oil storage tanks, boiler efficiency testing, gas fires, heating systems, ventilation inspections, battery operated smoke detectors, AC equipment, smoke vent systems, extraction units, air handling units, air conditioning units, catering equipment, deep cleaning of kitchen canopies and extract ductwork, refrigeration, pressurised hot water plant, distribution boards, electrical fixed wire testing, portable appliance testing, general lighting, lighting rigs, emergency lighting, standby generators, battery equipment, alternators, fire fighting equipment, fire blankets, carbon monoxide sensors, defibrillators, lightning protection, automated doors, mansafe systems, access control systems; and lifts and escalators.

Procurement Process

The Hard FM Services requirements were previously delivered via a range of external contractors which was subject to competitive tender in 2013 and split into individual trade disciplines (Lots).

In 2018, the Property and Facilities Management Division (P&FM), in conjunction with Commercial and Procurement Services (CPS) Team, commenced a procurement process to transform the delivery of the service provision into a more streamlined, proactive and planned approach to be delivered by two principal Hard FM partners.

The procurement process followed the stages of the Scottish Government’s Procurement Journey. Sustainable Procurement Tools such as Life Cycle Impact Mapping and the Sustainability Test were used to capture and assess risks and opportunities in terms of environmental impact.

Market Engagement:

The re-procurement of the service was highly complex and required a significant volume of market engagement, stakeholder and end user consultation, scope and price modelling, contract drafting, data gathering, and analysis to ensure the creation of the most efficient and effective contract which meets the needs of the Council and also secures and demonstrates Best Value.

Extensive engagement was undertaken with the market both before and during the tender process. The Council undertook 8 months of market engagement with prospective suppliers in the lead up to the Invitation to Tender (from a Prior Information Notice to the market engagement day), a 'you said, we did' engagement day during tender development and releasing a rough draft of the tender to potential bidders to comment, particularly on the terms and conditions, prior to issuing the final tender.

Examples of Best Practice in Market Engagement

  • City of Edinburgh Council held a ‘Talking Tenders’ event with potential manufacturers, suppliers and sub-contractors in partnership with the Supplier Development Programme. The Talking Tenders webinar gave the opportunity to gain insight into the contract opportunity and provide details of the key individuals from the pool of primary contractors to offer services or products to support their live tendering proposals.
  • Mid-Tender Contract Mark up: Bidders were invited to submit a mark-up of the Contract during the initial tender period. The purpose of this exercise was to provide an early opportunity for bidders to identify suggested amendments to the Contract provisions. As a result the City of Edinburgh Council legal team accepted 75% of changes suggested by bidders, understood what the bidders ‘red lines’ were in terms of contract provisions, this minimised procurement risk post tender.
  • The pre-procurement SME engagement events were successful as several sub-contractor attendees feature in the eventual proposed contract delivery teams.

The process started with 65 potential bidders. 

Embedding circular requirements into the tender process

Method statement

A Specific Section relating to the Circular Economy was written as part of the tender documentation (extract below), with support from Sustainable Procurement Limited (SPL) on behalf of Zero Waste Scotland under the ProCirc programme.

The specification focussed on a low carbon approach to delivery including a focus on circular economy, low/zero carbon transport methods and recycling.

Circular Economy – climate change emissions, materials, plant, equipment, waste

The Contractor shall support the Client’s aims to transition to a Circular Economy and will keep up to date with best practice circular opportunities within the FM and related sector, which seek to reduce emissions that contribute to climate change, material and resource use and waste generated.

The Contractor shall inform the Client of all relevant Circular Economy opportunities arising from the service and work with the Client to assess and implement those that align withvalue for money and cost certainty.

The Contractor shall work with the Client to strive to meet its external and internal targets for the reduction of waste and emissions which contribute to climate change, to develop sustainable ways of achieving zero waste to landfill and continuous improvements as advances in technology emerge.

The Contractor shall support this through practical measures that need to be monitored, which may include, but not necessarily be restricted to:

  • extending the useful life of equipment, tools, plant, materials and products used or installed;
  • repair, re-use, redeployment, refurbishment or remanufacturing of otherwise redundant equipment, products, plant and materials; and/or
  • the use of reclaimed, refurbished or remanufactured products, equipment, materials, plant and tools; and/or
  • the use of materials with high levels of recycled content. The Client is committed to working with the Contractor to ensure products and packaging used contain recycled content to the highest level feasible and in line with Scottish Government commitments;
  • the use of low impact (embodied carbon) materials;
  • the use of durable materials and systems and those for which circular outcomes are achievable, including but not necessarily restricted to aggregates, insulation, structural metals, fit-out metals, concrete/cement, composites/SIPs, plasterboard, timber, plastics and glass (all of which meet relevant performance and quality requirements);
  • the design of products installed, in conjunction with the relevant supply chain, for example to prevent early obsolescence,
  • the durability, repairability and availability of spare parts for products or equipment installed or used in the contract, so that their useful life may be optimised,
  • minimisation of waste and management in accordance with the Waste Hierarchy;
  • potential alternative service models for products, materials, plant, equipment and tools used.

Evaluation and scoring of environmental requirements

The specific tender question relating to circular economy represented 5% of the overall scoring process. However, environmental sustainability was embedded within many of the method statement questions and the Council asked for a full-time sustainability manager to be involved in the contract delivery for both Mitie & Skanska.

Results

Initial estimation of environmental outcomes

If the requirements regarding recycled content/ reuse and recycling of products/ materials are turned into practical implementation during the lifetime of the framework it is estimated that waste and carbon savings may be:

  • Approximately 1,548 tonnes of waste.
  • Between 23 Tonnes and 62 Tonnes CO2e.

This is based on:

  • £126m expenditure under the framework, with 5% (c£5m) relating to materials and products to which circular approaches may apply.
  • 25% of the £5m relates to waste that would otherwise be generated.45% is assumed to be metals, 50% plastics and the remainder timber.

NB. The above outcomes are very indicative estimates based on the assumptions shown. It is also recognised that these cannot be accurately determined, and outcomes will depend on the extent and nature of services procured under the framework, the development of market capability to support circular outcomes during the lifetime of the framework, assumed costs and weight of equipment and materials as well as reporting of outcomes through contract management in due course.  

An environmental and sustainability plan has been put in place as part of contract monitoring. The 2 contractors are responsible for developing, maintaining and implementing a waste hierarchy plan, outcomes and progress are reported monthly.

The contractor is required to produce data on the following:

  • methods of disposal of waste, showing clear evidence of using disposal methods which are environmentally preferable, in accordance with the Waste Hierarchy;
  • volumes/ quantities of the reuse, off or on-site repair, refurbishment, donation, sale or recycling, of all otherwise redundant materials, products, plant, equipment, tools and packaging;
  • the use of reused/ reclaimed, refurbished or remanufactured products, plant, equipment, materials and tools in Providing the Service; and
  • recycled content contained within materials, products, plant, equipment and packaging used.

‘The Contractor is required to work with the Client to continually improve the availability and accuracy of data and information provided that demonstrates how they are meeting the Client’s objectives, and/or identifies opportunities for further improvement in environmental, circular and social outcomes. In particular, the Contractor is required to inform of all relevant Circular Economy opportunities arising from the service and work with the Client to assess and implement those that align with value for money and cost certainty’.

The contractors have also both committed to a fully electric fleet of vehicles for this contract by 2023 with 50% by day 1 of the contract commencement.

They have also committed to the Council’s Construction Charter which focuses on fair payment, training, ethical employment practices and high standards of Health and Safety, with a commitment from both contractors for all parties engaged on the contract to be paid the real Living Wage.

Community Benefits

Community Benefits are contractual clauses included in Council contracts relating to training and recruitment, sub-contracting opportunities or a range of economic, social or environmental wellbeing outcomes when delivering Council goods, services and works and support Council’s economic and social regeneration objectives.

  • Establishment of a traditional skills academy – this joint academy between the 2 contractors and the Council provides work experience, training, apprenticeships and employment opportunities for long term unemployed, including skills such as stonemasons, carpenters, bricklayers etc. The contractors have committed to 40 apprenticeships, 40 skills campaigns and 80 work experience placements across the lifetime of the contract. There will also be a £15,000 per annum fund for community sponsorship.
  • Procuring relevant services from local SMEs - 85% of sub-contracting opportunities to be placed with contractors within a 10-mile radius of site (where appropriate). The inclusion of this clause will bring a substantial amount of money back to local spend. The contractors have also committed to the use of three social enterprises to be engaged in the delivery of the scope annually.

Community Benefits delivery and performance will be monitored throughout the life of the contract using the council’s online system. Community Benefits are reported in the Council Sustainable Procurement Strategy Annual Report to the Council’s Finance and Resources Committee and Scottish Government.

Lessons Learned

Delays in the award of the contract were due in large part to the Covid-19 pandemic, but also the need to undertake extensive engagement with the market given the transformation in required services.The Category Lead had lots of really positive feedback from unsuccessful bidders that the extensive market engagement made it the best tender process they have been involved in.

Delays have inevitably impacted on the extent of sustainability reporting that has taken place, at the time of writing this. However, there are clear reporting requirements regarding circular outcomes and a focus on continual improvement presents an opportunity for these contracts to significantly support the transition to Net Zero and a Circular Economy.  

The nature and extent of the focus on circular outcomes within the specification sent a clear message to potential bidders of the Council’s commitment and expectations. This has been supported by the awarded contractors, with an agreed environmental and sustainability plan.

Sharing Success

City of Edinburgh Council shared their tender documentation with Aberdeenshire Council to help inform their Strategic planning for their Hard FM tender process.