World class

Cross-border FM tenders are on the increase.

Last year, Barclays announced that it had awarded ISS a global FM deal to deliver integrated FM to sites in the UK, Europe, the Americas, Asia-Pacific and the Middle East.

Then earlier this year HSBC chose Jones Lang LaSalle as its sole global outsourcing provider of integrated FM services. The contract is for 11,000 sites across the world, covering 58 million square foot of real estate.

And this trend is set to continue. Research from Interserve and Sheffield Hallam University revealed that 59 per cent of facilities professionals believe there will be more global deals in five years’ time, and 53 per cent believe there will be more European deals.

While these tendering exercises are complex, there is a perception that they are difficult to achieve. But with careful planning and consideration, the chances of success can be greatly improved.

Communication

Effective communication is the most underestimated component of tender management, particularly with regard to projects that span a multitude of borders. It’s vitally important to establish an effective communications plan at the outset, and to ensure that both central and local requirements are addressed.

There are three primary areas that need to be considered:

1. Governance
   In any client organisation, there will be a specific process for decision-making that will usually entail seeking periodic sign-off from a panel/board of senior managers. Identifying that group, and ensuring there are clear lines of communication, both individually and collectively, will save a lot of headaches as the project progresses. Agreement as to the number and type of decision gateways and other process requirements also impacts on the programme, so this needs to be clearly established from the outset.
2. Local management
   When working across international borders, there can be cultural or operational issues that cause concern to local management teams. If unaddressed, these can have an adverse impact on the level of co-operation and buy-in that is achieved. By appointing a specific point of contact in each country, essentially, an ‘in-country’ project representative, the organisation demonstrates respect and concern for people’s views and perceived requirements. It also makes certain parts of the process (for example, data collection and site visits) more manageable.
3. Socialisation
   Any large-scale project inevitably impacts stakeholders and managers who are not directly involved in the process. While governance issues may have been addressed, it’s also important to understand the nature and extent of the wider stakeholder group and to ensure that they’re aware of the nature, scale and objectives of the exercise. This applies not just at the outset, but also as key milestones are achieved and well before any new solution is implemented.

Programme & logistics

Allowing enough time for the integrity of the tender process to be maintained is fundamentally important. While it’s always possible to “squeeze” certain process activities, lack of time will put pressure on both client and bidder teams and can result in errors being made, requirements being misinterpreted and excessive risk being costed into the bids.

Key elements to consider are:

1. Data collection
   This can be the most painful part of any tender process, and the quality, extent and accessibility of data is overestimated in almost every project. With a multi-geography tender, each data set has to be replicated in every country; and, while this is a difficult and time-consuming process, it’s also inevitable. Understanding when and for what purpose data is required means that some of the work can be deferred and carried out when the tender is underway.

   There will be requirements for the business case, the tender pack, pricing analysis and mobilisation, and some of that data is needed in its final form many months down the line. It also pays to be pragmatic about what’s actually available — the classic 80/20 rule can often be applied.

2. Portfolio scale and location
   This has a fundamental impact on the time that needs to be allocated for familiarisation, site visits and pricing, and effectively means that the timing for the development of bid submissions needs to be longer than for a single-geography tender process. A couple of months is typically enough to allow solutions to be properly developed, and to give bidders an opportunity to remove as much risk as possible from their pricing methodology.
3. Recognition of geographies
   While a portfolio might span a number of countries, it’s often the case that the bulk of space, expenditure and key/critical locations exist within a far smaller geography. Recognising this is important, because it can lead to a far more manageable approach in terms of site visits, pricing and mobilisation. It also allows for critical areas of risk to be addressed in a more effective way, and this tends to provide a level of comfort to senior stakeholders that can preclude unnecessary obstacles arising with regard to sign-off and approvals.

Supplier selection

Many clients have a predetermined idea about the type of FM delivery model they favour. But when asked, they can rarely explain their dogmatic stance. It’s far more important to think about deliverables and outputs than the delivery model, because if service requirements are properly specified, one can focus on best value without worrying about issues that won’t actually impact the objectives being achieved.

It follows that — at the initial RFI stage — one can include suppliers from both the FM and property sectors, suppliers with a perceived specialism in either hard or soft services, and suppliers who tend to favour both self-delivery and a third-party supply chain. The benefit of this is that, when bids are received, there should be a variety of solutions and models that each present a different option and a different approach to value engineering. Very often, the solution that seems to offer the best fit is not the one that might have been predetermined at the outset through a more blinkered approach to supply chain strategy.

General approach

Aside from the key issues above, there are a number of more general points that can make the process of cross-border tendering more manageable and more likely to deliver the required results.

1. Planning
   While the focus will be on the tender process itself, ensure that you allow enough time to properly address the initial business case and the activity required to support and develop it. This includes the data collection element, might incorporate the RFI, and certainly requires early and effective communication/socialisation.
2. Engagement
   Don’t be afraid to engage fully with the various bidding organisations; there’s no better way to understand an organisation’s culture, approach and values than to get to know its people. This can be in the form of bidder briefings, site visits, Q&A sessions etc.
3. Resources
   Large-scale tenders are always resource-hungry, and cross-border projects even more so. Client-side resources can rarely afford to devote as much time as necessary to the development and management of the process so it’s usually the case that external specialism is required in a consultative/advisory role. Whomever is engaged in this capacity should demonstrate not only a bulletproof process but also the knowledge and experience necessary in order to manage the issues and obstacles that will always arise.