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22 September 2022: Workplace Services Transformation Programme - Supply Chain Project

Published 29 September 2022

Accounting Officer Memorandum: Workplace Services Transformation Programme - Supply Chain Project

An Accounting Officer assessment for the Workplace Services Transformation Programmes’s Supply Chain Project was conducted in line with the Cabinet Office commitment to publish Accounting Officer Assessments for Government’s Major Projects. This Accounting Officer assessment considers the four standards of regularity, propriety, value for money and feasibility.

Background and context

The Government Property Agency (GPA) has inherited and will continue to inherit mixed commercial arrangements for service delivery, with a range of contract periods, specifications and performance levels. Clients report low levels of satisfaction with service levels, quality and responsiveness.

The Workplace Services Transformation Programme (WSTP) will build and run workplace services that can grow to meet demand and flex in response to business needs. They will drive delivery through promoting productivity and deliver savings through optimising our use of space. It is an enabler of the Government Hubs and Whitehall Campus programme, and will improve service delivery across the existing GPA-managed estate.

The programme’s projects are:

• Supply Chain Project (comprising five procurements)
• Demobilisation Project
• Digital Platform Project
• Organisation Design Project

The Supply Chain Project (SCP) is the most significant in the programme, in both impact and cost-terms. It will replace the existing set of inherited and tactical Workplace Services contracts with a consistent set of GPA-procured supply chain contracts. It will also enhance GPA’s capability through the appointment of a strategic partner; the Workplace Services Performance Partner.

The GPA is discharging its Public Sector Equality Duties by its use of Crown Commercial Service frameworks, and within each of them Joint Schedule 5 outlines the buyer’s responsibility in fulfilling its Public Sector Equality duty under S149 of the Equality Act 2010 by ensuring that it fulfils its obligations under each Contract.

While the GPA is not undertaking Equality Impact Assessments (EIA) at this stage of the Project, it will be undertaking EIAs for each of the contracts for the SCP once the preferred suppliers have been identified as part of our formal approval process.

This assessment covers the Supply Chain Project. As Accounting Officer I will provide an updated assessment at the point of the next business case which will cover the full scope of the programme. (December 2022).

Regularity

The GPA has invested in a trained commercial and legal team, with expertise in Government procurement regulations. They will work together to design and implement commercial strategies and present to the governance boards, both within GPA and Cabinet Office compliant routes to market.

This will include carrying out robust market engagement, selection of appropriate procedures, managing incumbent advantage and implementing rigorous evaluation of bids.

The outsourcing of these service contracts is not new and the market is mature. The procurements will be undertaken in line with the principles set out in the Sourcing Playbook (May 2021) and have been approved by the GPA Board, Cabinet Office and HM Treasury.

The programme does not require any additional legislation and complies with Parliamentary requirements for the control of expenditure, with Programme funds being applied only to the extent and for the purposes authorised by Parliament. In terms of legal powers to spend on WSTP, as a project procuring goods or services over a number of years, the SCP fits within the circumstances in which Managing Public Money (MPM) permits reliance on Supply and Appropriation Act provisions.

Spending approval was confirmed in July 2022, when the Chief Secretary to the Treasury approved the Outline Business Case (OBC) without conditions.

Regularity Accounting Officer Standard: Met

Propriety

The programme and its projects align with the Government Property Strategy and GPA’s Strategic Objectives (levelling up across the UK, transforming the civil service, carbon net zero and better value for money).

A Senior Responsible Owner (SRO) for the programme is in post. The SRO is directly accountable to the Chief Executive Officer of GPA. The programme’s wider governance framework is also well established. In line with the Infrastructure and Projects Authority (IPA) and Cabinet Office recommendations, over the past six months, the programme has focused heavily on ensuring appropriate governance is in place at all levels. At an SCP level, monthly project boards and planning take place, with clear escalation protocol to the programme board and SRO, enabling at pace senior decision making.

The re-procurement is for the provision of routine maintenance and support to our operational estate and is being delivered in line with the approved Outline Business Case. There is no need for additional primary or secondary legislation to support the procurements. Services sourced will be procured in a manner compliant with the Public Contracts Regulations 2015 as amended by Public Procurement (EU Exit) Regulations 2020 (PPR 2020).

Commercial Approach and Commercial Risk

The GPA will go to market with specifications that are designed to best fulfil business and customer needs.

The procurements will be delivered via five ‘market competitions’ under Crown Commercial Service (“CCS”) Facilities Management Frameworks CCS RM6168 – (this Procurement launched in July 2022); CCS RM6089 – (this Procurement launched in August 2022); CCS RM3830; CCS RM3830 and CCS RM6257 (this procurement will launch after the new Framework has launched in late 2022).

Based on the CCS frameworks, we are tailoring the service specifications to meet our needs. The proposed contracts will be for regular, labour-based, day-to-day services and do not involve major project work, and are not therefore considered to contain the significant major project risk which has led to the failure of other suppliers. CCS will have assessed the level of risk of each supplier, and the GPA will then carry out further due diligence as necessary. Supplier financial stability will be addressed by regular monitoring and close management of the contracts.

Propriety Accounting Officer Standard: Met

Value for Money

The services will be procured through a competitive process under the Crown Commercial Service (“CCS”) Facilities Management Frameworks (RM6169, RM3830, RM6089) and the contracts will be awarded to the bidders who present the most economically advantageous tender. I consider therefore that the award represents the outcome of that commercial process and secures value for money.

Funding for the services will be met from GPA fees charged to its client departments and organisations agreed in its Managed Service Agreements, Memoranda of Understanding, Memoranda of Terms of Occupation or Terms of Occupation Agreements. The costs of the current contracts are met through such fees.

Funding for the Workplace Services Transformation Programme implementation effort is provided within the GPA’s Spending Review 2021 settlement with HM Treasury and is managed in accordance with the principles of Managing Public Money.

Value for money has been assessed through a full options appraisal documented in the OBC. The following long-list options were initially assessed:

• In-house service delivery
• Single Facilities Management Supply Chain Partners (out-tasking)
• Bundled services
• Integrated Facilities Management (augmenting GPA’s capability to manage bundled services)
• Total Facilities Management
• Managing Agent, and
• Construction (hard services included as part of a construction project).

The option appraisal produced a preferred option which is a version of the Integrated Facilities Management model, where GPA’s capability is enhanced by the appointment of a Workplace Services Performance Partner to support GPA in transitioning to and managing service delivery through bundled regional services. GPA will also procure and deploy its own technology platform. This represents the best value for GPA, its clients and customers.

The SCP contracts all collectively form part of the Preferred Option detailed in the OBC and therefore collectively contribute to both the Programme and wider GPA Strategic Benefits. It is not possible (for this set of contracts) to fully de-couple the benefits of a single contract (particularly any cashable savings). At a Project Level, value for money was assessed when the OBC’s Economic Case was approved by HM Treasury. We have developed a Benefits overview for each contract which provides the level of detail required (for the non cashable savings)

Value for Money Accounting Officer Standard: Met

Feasibility

The Programme is subject to the requirements of the Government Major Projects Portfolio and is subject to review by the Infrastructure and Projects Authority (IPA).

A Programme Team is in place which oversees delivery across all the programme’s projects, including the supply chain project. The supply chain project is supported by the GPA’s expert commercial team and the Crown Commercial Service. It also benefits from dedicated operational support drawn from the GPA Workplace Service Delivery team.

The Programme Plan details the timeline for the completion of the individual projects and incorporates all the individual project timelines and ensures that resources can be mapped and allocated where needed. The Programme Plan is a live document which will be regularly updated, based on information from a number of stakeholders including on project progress.

Feasibility Accounting Office Standard: Met

Conclusion

I am satisfied that the Workplace Services Transformation Programme’s Supply Chain Project relies on clear legal powers, meets the standards in Managing Public Money and accords with the generally understood principles of public life, representing value for money for the Exchequer as a whole, and is feasible to deliver.

This summary will be published on the government’s website (GOV.UK). Copies will be deposited in the Library of the House of Commons, and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.

Accounting Officer’s name: Steven Boyd, Chief Executive, GPA

Date of signing: 22/09/2022