Innovative Procurement Solutions For Service Delivery
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- Elizabeth Verity Greene
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1 Innovative Procurement Solutions For Service Delivery I P W E A C O N F E R E N C E P 4 1 4
2 Background Facility Management Association (FMA) of Australia FM Action Agenda Innovation Working Group Innovation in Procurement Innovative Procurement Solutions Project FMA publication March
3 Introduction to Project The Innovation Working Group survey confirmed that further FM innovation was required in areas of services procurement. The initial scope of the project and proposed key areas were defined as: Contract Model (head contractor vs managing agent) Relationship (traditional vs partnering/alliancing) Pricing Structure (lump sum vs target cost) Commercial Model (KPIs and approach to risk and reward models) Contract Term and Extensions (fixed duration and extensions vs evergreen) The guidelines form the outcome from this project. 3
4 Pace of Change Over Time Old World Brave New World Change Change Clients Step improvement GAP Improvement Contractors Time 4
5 Procurement Stages Make or Buy Decision: What to Contract? Part 1 End of Contract Term (Contract Anniversay) Part 8 Business Case Part 2 Managing Service Delivery Part 7 Relationships, Pricing Structure and Incentives Part 3 Implementation Management Part 6 The Procurement Process (to Award) Part 5 Development Specifications Part 4 5
6 Content Innovation is dependent on a number of ingredients. For this presentation I am going to focus on four, namely: Trust Delivery Model Contract Relationships Commercial Model 6
7 Trust THE TRUST TAX TRUST = SPEED COST THE TRUST DIVIDEND TRUST = SPEED COST Source: Coveylink 7
8 Delivery Model: In-house Stakeholders & Customers External Technical Consultants Performance Based Service Level Agreement - KPIs In-house Strategy, Management & Operational Customer Service Agreement & KPIs - Strategic - Technical works mgmt - Contract Governance - Business Management - Project Management - Accounts / Analyst Building Fabric HVAC Lifts Cleaning Specialist Contractors 8
9 Delivery Model: Managing Agent Stakeholders & Customers Customer Service Agreement & KPIs External Technical Consultants In-house Strategy & Management Performance Based - Service Level Agreement - KPIs Performance Based SLA with KPIs Managing Agent Supervision, audit and approval of payments Building Fabric HVAC Lifts Cleaning Subcontractors could be contracted to Managing Agent on a pass through basis Specialist Contractors 9
10 Delivery Model: Head Contractor Stakeholders & Customers Customer Service Agreement & KPIs External Technical Consultants Performance Based Service Level Agreement - KPIs In-house Strategy & Management Head Contractor - Strategic - Technical works mgmt - Contract Governance - Business Management - Project Management - Accounts / Analyst Performance based agreement with KPIs Building Fabric HVAC Lifts Cleaning Specialist Contractors or Self Perform 10
11 Delivery Model: Alliancing / Partnering P R O J E C T C O N T R O L G R O U P / A L L I A N C E L E A D E R S H I P T E A M Client Participants Service Provider Sub Sub Contractor 1 Sub Contractor 3 Contractor 2 11
12 12
13 Contract Relationships T R A D I T I O N A L N O N - T R A D I T I O N A L R E L AT I O N S H I P C O N T R A C T I N G T R A D I T I O N A L Ad Hoc relationships Arm s length Transactional A L L I A N C I N G / PA R T N E R I N G Long-term Relationship Adjustment of Objectives Trust and shared goals Sharing of risks and opportunities Transformational 13
14 Pricing Structures Scope Productivity incentive Benchmarking Risks Innovation Defined Medium Poor Service Provider Limited BAU Lump Sum Schedule of Rates Management Fee Reimbursable/ Target Fee Broad More scope Good Client Better 14
15 15
16 Commercial Model T H E B A L A N C E D S C O R E C A R D Financial Customer Vision and strategy Business Process Innovation Kaplan & Norton 16
17 Summary Proactive contract management SLAs, KPIs & incentives Appropriate relationship pricing structure Right delivery model and contractor 17
18 MIKE O SHEA T: M: mike.oshea@aquenta.com.au
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