research-report-96-coming-clean-contractual-and-procurement-practices.doc

The case study councill is one of londons 33 boroughs

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The case study CouncilL is one of London’s 33 boroughs and employed over 3,000 employees in 2012. Government funding announced in 2010 led to a restructuring programme, and CouncilL’s headcount was reduced by 1,200 from a total workforce over 4,200.The local population covers over 250,000 people and is said to be diverse with extreme contrasts between areas which are among the most prosperous and the most deprived in London. The demographic background is relatively mixed, with a range of ethnic groups, which are predominantly White British, Black African and Black Caribbean. Its population also tends to be slightly younger than the national average. CleanD is a multinational infrastructure group which provides a range of services including construction, professional and support. Its total revenue was recorded at over £10 billion in 2013 and it has over 40,000 employees. The current contract has run since November 2012 and is under a four year framework so a retender will be made in 2016. Previously, the cleaning was done in-house and staff were employed directly by CouncilL. 10.2 Procurement Reasons for outsourcing The decision to outsource was primarily shaped by cost. Management at CouncilL made a review of facilities management and decided the outsourcing would be more cost-effective because industry knowledge could be drawn upon to make cleaning more efficient, but also would facilitate benchmarking across the marketplace. We had the desire to make some savings, so there was some, sort of management element to it….but also when we were reviewing our FM [Facilities Management] contracts for value for money, there is an established market out there with cleaning, so it was, in a sense, quite 69
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COMING CLEAN: CONTRACTUAL AND PROCUREMENT PRACTICES easy to benchmark and to go out into the market place and say, well, you know, there’s a developed market sector we didn’t need to go to, you know, the companies and…industry. (CouncilL, Procurement Manager). Tendering The contract is for the cleaning of CouncilL buildings, including the civic centre, libraries and offices but excluding schools and public toilets; school cleaning is managed by individual schools and public toilets are cleaned by a specialist company because of the need to deal with hypodermic needles and so forth. Six tenders were received by CouncilL and their experience and capability were assessed in the first round using a pre-qualification questionnaire (PQQ). Criteria for acceptance Three criteria were important for this contract. The first was the quality of delivery and this was assessed by a methods statement which asked cleaning firms specific questions about their experience, management systems and evidence to support their case. The second criteria was the cleaning firm’s ability to meet the London Living Wage, although CouncilL pointed out the difficulty with this because it could not be included as a contractual requirement: You’ve got to remember it’s not a legal obligation, so it does make it difficult in procurement, it can be challenged’. (CouncilL, Procurement
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