Case Study - Mobilisation of a major FM Services contract

Executive Summary

This case study highlights some of the issues facing Interserve immediately following the mobilisation of a significant FM services contract for a major financial services institute.

The challenges were not necessarily unusual for a contract of this size and complexity, where mobilisation and ‘business as usual’ had to be achieved within particularly tight timescales; however the solutions were unique to this venture.

The Challenge

Interserve commenced the contract to deliver FM services to an estate of over 1500 buildings for a guaranteed maximum price.  The mobilisation period was extremely tight for a contract of this size and complexity and resulted in a number of interim solutions being adopted in order to meet contractual obligations.  Following a three month ‘bedding in’ period Macallam Interim were asked to find a suitable person to help develop and manage more permanent solutions to a number of initiatives aimed at ensuring contract compliance, and delivering a more cost effective service.

The Solution

With contract deadlines to meet property condition surveys had to be undertaken to the entire estate on a phased basis.  The chosen solution was to outsource the majority of the work to an organisation that could provide national coverage, and the activities were project managed ensuring that the required reports were issued to the client on time.

The majority of the workforce had transferred to Interserve under TUPE and there was a need to educate them in the key contractual requirements.  The many documents that formed the contract were researched and a simpler summary was developed for use in designing training modules for staff and production of a contract compliance matrix which allows Interserve to continually monitor the achievement of key deliverables.

Because of the short timescales most of the supply chain had ben engaged in haste.  The original sub-contract documents were reviewed for suitability ensuring the correct drafting to ensure they were back to back with the head contract and that key requirements from the latter were incorporated.  At the same time our Interim Manager assisted in the procurement and development of the Supply Chain Governances and associated processes.

With over 1500 properties in a constantly changing estate and a supply chain inherited from the previous contractor it was necessary to verify the accuracy of the property portfolio information in each of the major sub-contracts.  This exercise identified incorrect billing totalling c £400k per annum.

Interserve had given a commitment to increase self-delivery of service.  Following in-depth research and the development of business cases annual savings in excess of £300k were identified.

A number of service improvement initiatives were developed and submitted to the client for approval, the results of which will have a positive commercial and operational benefit to the contract.

The Benefits

Aside from the specific benefits identified above, a number of smaller initiatives such as the development of “Contract Classification Notes” (effectively FAQ’s relating to contract interpretation issues) were implemented and the net result of all the work undertaken contributed to a considerable bottom line improvement as well as a better understanding of Interserve’s contractual responsibilities. 

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