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Tender Report Alan Heron Director of Operations

Royal Holloway University of London OJEU Ref: 2011/S 249-406281 Cleaning to Academic & Residential Areas March 2012


Table of Contents 1

Copyright Notice ..................................................................................................... 2

2

Executive Summary ................................................................................................ 3 2.1

Current Status .................................................................................................. 3

2.2

Key Stakeholders ............................................................................................. 3

2.3

Scope ............................................................................................................... 3

2.4

Strategic Goals ................................................................................................. 3

2.5

Contract Award ................................................................................................. 3

3

Contract Strategy .................................................................................................... 4 3.1

CEL Procurement ............................................................................................. 4

3.2

Proposed New Contract Structure .................................................................... 4

3.3

Scope of Contract ............................................................................................. 4

4

Tender Process ....................................................................................................... 7 4.1

Background ...................................................................................................... 7

4.2

Responses ....................................................................................................... 7

5

PQQ Evaluation ....................................................................................................... 8 5.1

Part A – Background Information (10%) ........................................................... 8

5.2

Part B - Financial Status Analysis (20%) .......................................................... 9

5.3

Part C - Business Probity Analysis (Pass / Fail) ................................................ 9

5.4

Part D - Quality of Service (20%) .................................................................... 10

5.5

Part F – Commodity Specific (50%) ................................................................ 10

5.6

PQQ Summary ............................................................................................... 11

6

ITT Evaluation........................................................................................................ 13 6.1

Quality (30%).................................................................................................. 14

6.2

Technical Capability (20%) ............................................................................. 14

6.3

Lot Specific and Whole Life Cost - Lot 1 (Academic) (50%) ............................ 15

6.4

Lot Specific and Whole Life Cost - Lot 1 (Residential) (50%) .......................... 15

6.5

Aramark’s Response to Mandatory Question.................................................. 16

6.6

Overall Scores – Lot 1 (Academic) ................................................................. 17

6.7

Overall Scores – Lot 2 (Residential) ............................................................... 18


7

Pricing Anomalies ................................................................................................. 19 7.1

Lot 1 – Academic (Total Price)........................................................................ 19

7.2

Lot 1 – Academic (Other Prices) ..................................................................... 20

7.3

Lot 2 – Residential (Pricing Spreadsheet - Logic & Reasoning) ...................... 20

7.4

Lot 2 – Residential (Total Costs)..................................................................... 21

7.5

Lot 2 – Residential (Other Costs) .................................................................... 23

8

Recommendations ................................................................................................ 24 8.1

Lot 1 (Academic) Recommendation ................................................................ 24

8.2

Lot 2 (Residential) Recommendation .............................................................. 24

8.3

PTC Meeting Format ...................................................................................... 24

9

Supplier Profiles.................................................................................................... 25 9.1

Aramark .......................................................................................................... 25

9.2

Balfour Beatty ................................................................................................. 25

9.3

Busy Bee ........................................................................................................ 26

9.4

Churchill ......................................................................................................... 26

9.5

Hayward ......................................................................................................... 26

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1 Copyright Notice

CEL Procurement retains all copyrights and intellectual property in the content, graphic images and ideas contained in this report. We hereby authorise you to electronically copy the document solely for the purpose of transmitting or viewing the information. You may not mirror, modify or otherwise alter any content in this document for future use, or print the information contained herein, without written permission from CEL Procurement. Except as expressly provided above; nothing contained herein shall be construed as conferring any license or right under any CEL Procurement copyright, patent or trademark. The opinions stated herein are those of the author and may not necessarily reflect those of CEL Procurement or its employees.

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2 Executive Summary 2.1 Current Status The tender is still in process, with all ITT submissions having been received and evaluated, but some clarifications will be required prior to any award being made, and the tender concluded. A review of the prices that have been submitted by suppliers highlighted significant differences from one supplier (Balfour Beatty) within Lot 2 (Residential Areas). The scope and nature of these differences is discussed later in this report, but suggest that Balfour Beatty have misinterpreted the scope of the agreement, or made some fundamental mis-calculation in their pricing submission for this Lot.

2.2 Key Stakeholders   

The Principal, Directors, Managers, and Procurement staff of Royal Holloway and Bedford New College. Students, staff, and visitors to The College. Contractors who have tendered for this contract.

2.3 Scope The new contract will have two lots. Lot 1 relates to the cleaning provision of the academic areas within The College, whilst Lot 2 covers the cleaning of the residential areas of the College.

2.4 Strategic Goals  

Tender with 2 distinct lots – Provision of Cleaning Services to Academic and Provision of Cleaning Services to Residential Areas. Award this contract to a contractor(s) who can clearly demonstrate a high quality of cleaning standards, deliver tangible and realistic cost benefits and will provide a clear and succinct delivery of pertinent and meaningful management information. To create a partnership between the contractor(s) and Royal Holloway, University of London to engender continuous improvement and benefits, not only at the outset of the contract but throughout.

2.5 Contract Award The contract has not yet been awarded. Contract award is expected to take place subsequent to post-tender clarifications with suppliers to the satisfaction of The College.

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3 Contract Strategy 3.1 CEL Procurement Royal Holloway contracted CEL Procurement (CEL) to complete the tender process for the provision of their cleaning services to Academic and Residential Areas.

3.2 Proposed New Contract Structure It was proposed to create the tender in a multi-lot format to eliminate the need to issue two separate tenders, by adding Lot 1 as the Provision of Cleaning Services to Academic Areas and Lot 2 as the Provision of Cleaning Services to Residential Areas into the tender. In summary the new framework contract will have 2 defined lots. This will allow the more complex aspects of Lot 2 to be separate from the comparatively simpler aspects of the academic areas within the College. This will also enable the College to recognise the different influencing factors on these spend types, but to report and analyse, these distinct areas far more effectively. Furthermore, it will allow the College to engage with the contractor in a more defined and effective manner.

3.3 Scope of Contract The contract notice placed in OJEU described the contract as follows: This tender comprises Lot 1 and Lot 2; the award will be for either lot 1 or lot 2, or both. The annual value of the contract for both lots is 1 550 000 GBP. The duration of the contract is a minimum of 4 years therefore the total value of the contract is £6,200,000.00 and is apportioned between lot 1 and lot 2 as follows: Lot 1: £2,200,000.00 Lot 2: £4,000,000.00 Lot 1 - The Cleaning Services to the Academic areas totals approx. 51,380 square metres comprising of 27 on campus buildings (Egham Postcode) and 8 off campus buildings (within short distance of the campus). There are also two buildings in central London at Bedford Square and Gower St. Typical types of cleaning that will be required for the Academic areas include, but are not limited to the following:        

Sweeping, vacuuming, and damp mopping floor surfaces. Damp dusting. Cleaning and polishing metal fittings. Floor maintenance. Emptying and cleaning waste receptacles. Replenishing toilet consumables. Cleaning blackboards and whiteboards. Cleaning vending machine and drinking areas.

These cleaning tasks will be required in a variety of different areas within the academic areas, including:

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      

Stairs. Foyers. Toilets, Washrooms, and Shower Areas. Kitchen / Pantries. Lifts. Teaching Rooms. Other Miscellaneous Areas.

Lot 2 - The Cleaning Services to the Residential Areas totals approx. 57,850 square metres comprising 11 on campus buildings (Egham Postcode) and 2 off campus buildings (within a 1.5 mile radius of the campus). There are 2 305 study bedrooms within the Residential Areas. There is also a requirement to deep clean up to 17 tuition houses as required. Typical types of cleaning that will be required for the Residential areas include, but are not limited to the following:                 

Sweeping, vacuuming, and damp mopping floor surfaces. Damp dusting. Cleaning and polishing metal fittings. Clean all entrance glass doors including revolving doors. Clean all toilets, showers, bath, basins and urinals, including plugs and plug holes. Clean and polish all mirrors. Descale shower heads. Steam clean floors, tiles, showers. Dispose of general waste (empty bins). Dispose of recyclable waste. Clean bedrooms (as required by bookings). Change bed linen and towels (as required by bookings and length of stay). Floor maintenance. Emptying and cleaning waste receptacles. Replenishing toilet consumables. Cleaning blackboards and whiteboards. Cleaning vending machine and drinking areas.

These cleaning tasks will be required in a variety of different areas within the residential areas, including:          

Stairs. Foyers. Toilets, Washrooms, and Shower Areas. Kitchen / Pantries. Lifts. Dining Areas. Bedrooms. Executive Offices. Conference Areas. Other Miscellaneous Areas.

Both services will cover 52 weeks per year, which will include public holidays and College discretionary days (currently 6), except when the areas are closed.

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Tenderers should be aware of term times for both lots as this will affect the level of cleaning required at given periods of time: 1 - Term time comprises 30 weeks of timetabled teaching although many buildings are open all year; residences are 30, 38 or 50 weeks at 99 % occupancy (depending on residential area) when cleaning operations consist of communal areas only. Bedrooms are not included. 2 - College vacation times during Christmas, Easter and summer (bedrooms available for 12 or 22 weeks). During vacations the study bedroom stock operates as a hotel with daily servicing of bedrooms, en-suites and all communal areas. The specification for the types of operation will be made available within the Invitation to Tender documentation. 2011/2012 Term Dates are as follows:    

Autumn Term: Mon 19.9.2011 to Fri 9.12.2011. Spring Term: Mon 9.1.2012 to Fri 23.3.2012. Summer Term: Mon 23.4.2012 to Fri 8.6.2012. Graduation Ceremonies: 9.7.-13.7.2012.

2012/2013, 2013/2014, and 2014/2015 Term Dates are expected to be similar in nature to 2011/12, and will be confirmed during the term of this contract. Note: It is likely that TUPE may form part of this tender for both options.

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4 Tender Process 4.1 Background It was decided that the accelerated restricted procedure would be used to tender the contract. This was due to the high expected interest in the contract, and the expected necessity to reduce the amount of submissions prior to moving to ITT stage. CEL Procurement created the full suite of tender documentation for the agreement, including the Pre-Qualification Questionnaire (PQQ), the Invitation to Tender (ITT) and two sets of evaluation matrices. The OJEU advert for expressions of interest in The Provision of Cleaning Services to Academic and Residential Areas (Royal Holloway-FM-170) was placed in the EU Journal on 23rd December 2011 (Contract Notice 2011/S 249-406281). CEL received 25 expressions of interest from organisations that all downloaded the PQQ documentation from the College‟s In-Tend system.

4.2 Responses The following 24 suppliers returned the PQQ documentation:                        

Aramark Atlas Balfour Beatty Busy Bee C&K Group Churchill Ecovert FM Enterprise Falilicom Glen Cleaning Green Zone Hayward Incentive QAS LCC LPM MAR Mitie NViro Ocean Office & General Resource UK Ltd Superclean Wyclean World Cleaners

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5 PQQ Evaluation All 24 suppliers listed on the previous page submitted completed PQQ‟s within the advertised timescales. The following criteria and associated weightings were agreed and used in the PQQ section: Criteria

Weighting

Part A – Background Information

10%

Part B – Financial Status

20%

Part C – Business Probity

Pass / Fail

Part D – Quality of Service

20%

Part F – Commodity Specific

50%

The evaluation of the PQQ responses was a one stage process. All candidates were required to complete generic questions relating to: Background Information, Financial Status, Business Probity, Quality of Service and Commodity Specific.

5.1 Part A – Background Information (10%) Within this section CEL assessed such areas as; insurance certificates, the organisational set up, existing public sector contracts and the number of public sector contracts that have been terminated:

Part A - Background Information (10%) 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%

Figure 1 – PQQ Part A – Background Information Scores

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5.2 Part B - Financial Status Analysis (20%) All tenderers were required to attach their three most recent sets of company accounts. CEL assessed the financial status of each supplier and looked specifically at the Current Ratio, Net Profit % and ROI. The overall scores are shown in the graph below:

Part B - Financial Status (20%) 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%

Figure 2 – PQQ Part B Financial Status Scores

5.3 Part C - Business Probity Analysis (Pass / Fail) A fundamental section of the PQQ with questions included relating to; bankruptcy, legal proceedings, employee vetting, professional conduct, information accuracy, social security contributions, tax payments, criminal law act 1977, public bodies corrupt practices act 1889, bribery, money laundering regulations 2003, Article 45 (1) of the public sector directive, criminal justice act, drug trafficking act and fraud.

Part C - Business Probity (Pass / Fail) Pass

Figure 3 – PQQ Part C Business Probity Scores

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5.4

Part D - Quality of Service (20%)

The purpose of this section is to obtain an early indication of the quality of service the suppliers will be able to deliver if awarded the contract. Questions also looked at escalation procedures, service feedback, quality assurance & accreditation, and innovation.

Part D - Quality of Service (20%) 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%

Figure 4 – PQQ Quality of Service Scores

5.5 Part F – Commodity Specific (50%) Tenderers were asked to provide responses to questions that are commodity specific, such as detailing their experience, working within a complex environment, legitimacy to work, differentiation of service offering, TUPE experience, environmental accreditations, health and safety policy and records, employee health and safety, induction training, health and safety plans and monitoring, COSHH process management and bribery Act 2010. The overall scores are shown in the graph below:

Part F - Commodity Specific (50%) 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

Figure 5 – Commodity Specific Scores

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5.6 PQQ Summary Below is a summary of the results of the PQQ evaluation.

Overall Rating 95% 90% 85% 80% 75% 70% 65% 60% 55% 50%

Figure 6 – PQQ Summary Scores

It was decided to balance the desire to only take through a manageable amount of tenderers to the ITT stage, with a need to ensure that The College had sufficient quality in depth within the number being taken to the ITT. In line with the communication given to all interested parties within the contract notice (2011/S 249-406281) it was agreed to take six suppliers through. Both CEL and The College felt that the six suppliers shortlisted would provide more than adequate choice and flexibility for the final ITT stage. Given the previously aggressive and dogmatic challenges The College had received up to this point from one of its incumbent suppliers, World Cleaners Limited, it was decided to review the PQQ evaluation, and proposed result with The College‟s legal representatives, Weightmans. Weightmans agreed with the evaluation and subsequently also worked with CEL to ensure the communication given to unsuccessful tenderers at this point was both legally correct and robust. Despite some initial challenges from both World Cleaners Limited, and MITIE, the PQQ award was concluded, and the table below shows the final results, including which tenderers were subsequently taken through to the final ITT stage.

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Tenderer

Overall % Score

Overall Ranking

Through to the ITT

Hayward

89.37%

1

Yes

Aramark

87.54%

2

Yes

LCC

87.47%

3

Yes

Churchill

87.36%

4

Yes

Busy Bee

87.32%

5

Yes

Balfour Beatty

87.12%

6

Yes

Enterprise

85.86%

7

No

MAR

85.48%

8

No

Ecovert FM

85.14%

9

No

Ocean

84.65%

10

No

Superclean

84.05%

11

No

Incentive QAS

83.93%

12

No

C&K Group

83.70%

13

No

Resource UK Ltd

82.66%

14

No

World Cleaners

82.51%

15

No

MITIE

82.34%

16

No

Facilicom

78.71%

17

No

Atlas

77.26%

18

No

Glen Cleaning

73.68%

19

No

NVIRO

71.20%

20

No

Office & General

67.68%

21

No

Green Zone

66.50%

22

No

LPM

65.03%

23

No

Wyclean

61.73%

24

No

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6 ITT Evaluation

The tenderers were all issued ITT documentation, and asked questions on the criteria below:

Criteria

Weighting

Quality

30%

Technical Capability

20%

Lot Specific & Whole Life Cost

50%

The ITT has been split into two lots, Lot 1 covers the academic cleaning requirements and Lot 2 covers the residential cleaning requirements. The difference between these lots can be found in the pricing aspect of the evaluation. LCC withdrew from the process during this stage, and therefore did not submit a tender. CEL contacted them to find out the reasons for this and resolve if possible, to which they responded that they unfortunately didnâ€&#x;t have the internal resources to complete the tender. Both the Quality and Technical Capacity sections of the ITT were applicable to tenderers applying to either Lot of the tender. As all five remaining tenderers applied for both Lots, the analysis below shows one graph for each of the Quality and Technical Capability sections, but two graphs for the Lot Specific & Whole Life Cost section which had distinct pricing submissions for each Lot, and therefore has two graphs.

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6.1 Quality (30%) Within this section suppliers were asked about all aspects of their approach to the account management, management information, customer review meetings, COSHH regulations, health and safety act, reporting of accidents, equal opportunities, bribery act 2010, KPI‟s and Service Level Agreement. The results are as follows:

Quality - Lot 1 & Lot 2 (30%) 30% 29% 28% 27% 26% 25% Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

Figure 7 – ITT Quality Scores for Lot 1 and Lot 2

6.2 Technical Capability (20%) This section questioned suppliers on cleaning tasks and standards, cleaning materials, environmental considerations and progress, invoice queries, contract conditions and contract specifications. A mandatory question regarding the suppliers‟ acceptance of conditions of contract was included within this section to which all suppliers agreed, apart from Aramark. Please see the graph below for the results (Aramark would have scored the following if they hadn‟t been disqualified for not agreeing to this mandatory question) :

Technical Capability - Lot 1 & 2 (20%) 20% 18% 16% 14% 12% 10% Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

Figure 8 – ITT Technical Capability Scores for Lot 1 and Lot 2

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6.3 Lot Specific and Whole Life Cost - Lot 1 (Academic) (50%) The tenderers were asked to complete a spreadsheet giving costs for the delivery of the service to the academic areas of the college, and also were asked questions about any risk and reward schemes which they would like to work with The College to develop.

Lot Specific & Whole Life Cost - Lot 1 50% 40% 30% 20% 10% 0% Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

Figure 9 – ITT Lot Specific & Whole Life Cost Scores for Lot 1

6.4 Lot Specific and Whole Life Cost - Lot 1 (Residential) (50%) The tenderers were asked to complete a spreadsheet giving costs for the delivery of the service to the residential areas of the college, and also were asked questions about any risk and reward schemes which they would like to work with The College to develop.

Lot Specific & Whole Life Cost - Lot 2 (50%) 50% 40% 30% 20% 10% 0% Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

Figure 10 – ITT Lot Specific & Whole Life Cost Scores for Lot 2

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6.5 Aramark’s Response to Mandatory Question Aramark answered “no” to their ability to agree with two appendices to the ITT: - „Contract Conditions – General‟, and „Contract Conditions – TUPE‟. They also responded “no” to a mandatory question asking about their ability to agree to a third appendix, „Contract Specifications‟ and were subsequently removed from the process and given an overall score of zero. Aramark gave the following response to the mandatory question on Contract Specifications: “As with Appendix. A (Contract Conditions - General), we would want to get clarity around some of the provisions. For example, our prices are proposed on a fixed price basis. Accordingly, we are not sure that the language in Appendix. E regarding the return of discounts and the 5% cap on a mark-up to suppliers’ costs (e.g. at sections 6.5.4, 6.5.6 – 6.5.8, 6.6.1 and 6.6.3) is relevant.” The impact of Aramark‟s response should have no tangible impact upon the award for either lot. If Aramakr had agreed to the three questions (including the mandatory question) above, their final scores would have been: Lot 1 (Academic) – 78.48% (putting them in second place behind Hayward) Lot 2 (Residential) – 73.54% (putting them in fourth place behind, Busy Bee, Balfour Beatty, and Hayward)

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6.6 Overall Scores – Lot 1 (Academic) As it stands at the moment the final scores for Lot1 (Academic) are as follows:

Overall Rating - Lot 1 (Academic) 85% 80% 75% 70% 65% Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

Figure 11 – ITT Overall Rating Scores for Lot 1

Tenderer

Overall % Score

Overall Ranking

Hayward

81.96%

1

Balfour Beatty

77.33%

2

Busy Bee

76.96%

3

Churchill

73.99%

4

Aramark

0%

KO

Hayward came out quite clearly in 1st position for this Lot, over 4.5% ahead of 2nd place (3.5% if Aramark had agreed to their questions as previously discussed. There were no prices or responses which caused any concern (other than the Aramark responses previously discussed), and therefore the scores for Lot 1 (Academic) appear to be in a final position, subject to approval from The College.

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6.7 Overall Scores – Lot 2 (Residential) As it stands at the moment the final scores for Lot2 (Residential) are as follows:

Overall Rating - Lot 2 (Residential) 100% 80%

60% 40% 20% 0% Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

Figure 12 – ITT Overall Rating Scores for Lot 2

Tenderer

Overall % Score

Overall Ranking

Busy Bee

82.07%

1

Balfour Beatty

81.39%

2

Hayward

74.93%

3

Churchill

69.57%

4

Aramark

0%

KO

Busy Bee came in 1st position for this Lot, just ahead (0.68%) of Balfour Beatty in 2nd place. There were some significant anomalies seen in the pricing for Lot 2 (Residential), which are discussed in detail in the next section of this report. It is envisaged that The College will conduct some post-tender clarifications before awarding this Lot.

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7 Pricing Anomalies 7.1 Lot 1 – Academic (Total Price) The prices within Lot 1 (Academic) seem to be viable upon initial analysis. Although Churchill have submitted some relatively expensive pricing, the other 4 tenderers, have all submitted pricing within a tight tolerance of one another, reflective of an standard normal distribution. This can be seen below:

Deviation (%) from Average Total Price 70% 60% 50% 40% 30% 20% 10% 0% -10%

Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

-20% -30% If we make the reasonable assumption that Churchill has submitted pricing higher than the market thereby skewing the average total price, and remove their pricing from the calculation, the results become even more apparent, clearly showing a tight banding of prices submitted from Aramark, Balfour Beatty, Busy Bee, and Hayward, and a relatively high pricing submission from Churchill:

Deviation (%) from Average Total Price (Excluding Churchill) 100% 80% 60% 40% 20% 0% -20%

Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

The result above suggests that all suppliers understood the pricing, and scope of the contract, and submitted realistic bids (apart from Churchillâ€&#x;s relatively expensive submission).

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The final pricing for the Academic Model (which is illustrative of actual expected service levels) was as follows: Tenderer

Academic Total Cost

% from Lowest Cost

Busy Bee

£264,060

0.0%

Aramark

£277,139

5.0%

Balfour Beatty

£280,368

6.2%

Hayward

£307,825

16.6%

Churchill

£539,231

104.2%

7.2 Lot 1 – Academic (Other Prices) Hourly rates for additional ad hoc work varied from £7.47 (Aramark) to £10.82 (Balfour Beatty). Churchill submitted an hourly rate of £8.39, which suggests that their relatively expensive total price is the result of an over-statement of time taken to perform the cleaning tasks. Prices for the bespoke cleaning tasks had some significant variation between the five submissions, although these should be consideration with some degree of perspective, as they probably account for less than 1% of the total price, and are therefore relatively non-strategic. Prices for Graduation Week varied from £477 (Hayward) to £2,091 (Aramark). Prices for the College Open Day varied from £0 (Aramark) to £335 (Churchill). Finally, the prices for the VIP Ceremony varied from £0 (Aramark) to £200 (Busy Bee). Variations in the pricing for these bespoke cleaning tasks could be attributed to differing business models, or the comparatively limited amount of information given regarding the tasks. Whilst consideration should be given to clarifying these costs, the bespoke cleaning is relatively insignificant when considering the value of the total contract for the Academic Areas. Given the apparent viability of the total prices for this Lot, the bespoke cleaning prices discussed above appear to be the only minor areas which may require clarification.

7.3 Lot 2 – Residential (Pricing Spreadsheet - Logic & Reasoning) The pricing spreadsheet used to capture tenderers‟ costs was based upon three models of occupancy – Maximum, Medium, and Low. The Medium Occupancy model used actual Royal Holloway occupancy levels from 2011, and the Max and Low models were variants to these figures. The models were based upon collecting pricing for each building for the following elements:  Term Time Charge per week

  

Preparation Clean Cost Vacation Time (Occupied) Charge per week Vacation Time (Unoccupied) Charge per week

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The prices collected above would then be entered into the statistical models for Low, High, and Medium Occupancy respectively. If the Founders (North Tower) is taken as an example of the High, Medium, and Low occupancy models, the following variables would be seen: High Occupancy

Medium Occupancy

Low Occupancy

Term Time (weeks)

30

30

30

Vacation Time (Occupied)

22

8

6

Vacation Time (Unoccupied)

0

14

16

Preparation Cleans

8

4

2

Founders – North Tower

All the residential buildings used similar logic to that shown above to generate individual costs for each building in Maximum, Medium, and Low Occupancy Models. All the prices generated using Maximum Occupancy variables were then collated to give a total Maximum Occupancy cost. This exercise was then repeated to give total costs for Medium Occupancy, and Low Occupancy Models.

7.4 Lot 2 – Residential (Total Costs) The total cost for the Maximum Occupancy Model was the first area of concern regarding the pricing submitted by Balfour Beatty. Balfour Beatty‟s pricing is significantly lower than any of the other tenderers to the extent that questions must be asked regarding the viability of their submitted pricing. This concern is echoed with the pricing submitted in the other occupancy models. The deviation from the average total pricing for the Maximum Occupancy Model is shown below:

Deviation (%) from Average Total Cost (Max Occupancy) 40% 20% 0% -20%

Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

-40% -60% -80% The considerable deviation from the average total cost which Balfour Beatty‟s submission represented can clearly be seen from the graph above. Balfour Beatty‟s total cost (£265k) was 65.3% below the average total cost (£762k). It is a reasonable assumption that Balfour Beatty has either made a miscalculation of their costs or a misinterpretation of the requirement, and their pricing is skewing the Total Cost. If their costs Royal Holloway University of London – Tender Report

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were subsequently removed from the Average Total Cost calculation– they would actually be in excess of 70% below the „normalised‟ average total cost, with the remaining four tenderers deviating by between 1.6% and 11% from the re-calculated average total cost. This would suggest that the other four tenderers all shared a similar understanding of the cost of providing the service, and thereby submitted costs within a normal tolerance of one another. The concern over Balfour Beatty‟s pricing is continued when the analysis of the remaining Medium and Low Occupancy Models is conducted. The deviation from the average total costs for the remaining two models is shown in the graphs below:

Deviation (%) from Average Total Cost (Medium Occupancy) 60% 40% 20% 0% -20%

Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

-40% -60% -80% As can be seen from the graph above, Balfour Beatty‟s total cost (£235k) was 61.4% below the average total cost (£609k). If their costs were subsequently removed from the Average Total Cost calculation– they would actually be in excess of 66% below the „normalised‟ average total cost, with the remaining four tenderers deviating by between 3.1% and 26.3% from the recalculated average total cost.

Deviation (%) from Average Total Cost (Low Occupancy) 60% 40% 20% 0% -20%

Aramark

Balfour Beatty

Busy Bee

Churchill

Hayward

-40% -60% -80% As can be seen from the graph above, Balfour Beatty‟s total cost (£227k) was 60.4% below the average total cost (£574k). If their costs were subsequently removed from the Average Total Cost calculation– they would actually be in excess of 65% below the „normalised‟ average total cost, with the remaining four tenderers deviating by between 4.2% and 30.5% from the recalculated average total cost.

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It can be seen from the previous three graphs that Churchill also look relatively expensive for this Lot. This is consistent with the results seen in Lot 1. The final pricing for the Residential Models (of which the Medium Occupancy Model is most illustrative of actual expected service levels) were as follows: Maximum Occupancy Total Cost

Medium Occupancy Total cost

Low Occupancy Total Cost

Balfour Beatty

£265,062

£235,480

£227,177

Busy Bee

£789,096

£517,845

£459,691

Hayward

£872,943

£681,373

£639,372

Aramark

£929,284

£731,645

£688,743

Churchill

£957,946

£880,463

£856,881

Tenderer

7.5 Lot 2 – Residential (Other Costs) Hourly rates for additional ad hoc work were the same rates submitted for Lot 1, and therefore varied from £7.47 (Aramark) to £10.82 (Balfour Beatty). Churchill submitted an hourly rate of £8.39, which suggests that their relatively expensive total price is the result of an over-statement of time taken to perform the cleaning tasks. Balfour Beatty‟s hourly rate was the highest rate submitted, and yet their total price was in some instances merely 25% of the average of the other four tenderers. This would suggest that Balfour Beatty either made some kind of fundamental arithmetic mis-calculation in producing their costs, or made a drastic under-estimation of the labour required to complete the tasks. In either instance the pricing submission from Balfour Beatty appears to be unsustainable, and should be queried in detail if a PTC with them is required. It should be noted however that if Balfour Beatty do „correct‟ their pricing to be more reflective of the other prices seen in this tender, then they are likely to move from 2nd placed ranking to as low as 4th or 5th. This is due to the fact that their anomalous pricing is a major contributing factor to their high ranking position.

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8 Recommendations 8.1 Lot 1 (Academic) Recommendation It is the recommendation of this report that The College conducts a post tender clarification (PTC) meeting with the top-ranked tenderer (Hayward). The PTC meeting should be used to satisfy The College of any queries regarding the submission. Given the previous analysis of the pricing and responses, it is envisaged that there should be very little of any significance to clarify with Hayward. It is recommended that The College adopts a principle of holding PTC meetings with the 1st ranked suppliers in each lot, and only moving to the 2nd ranked supplier if the 1st ranked supplier‟s PTC is unsatisfactory, or the supplier withdraws from the process upon clarification.

8.2 Lot 2 (Residential) Recommendation As above, it is recommended that The College adopts a principle of holding PTC meetings with the 1st ranked suppliers in each lot, and only moving to the 2nd ranked supplier if the 1st ranked supplier‟s PTC is unsatisfactory, or the supplier withdraws from the process upon clarification. This would mean a PTC meeting with Busy Bee prior to a meeting with Balfour Beatty (if required), and so on.

8.3 PTC Meeting Format It is recommended that careful consideration is given to the format of the PTC meetings. Establishing the areas which require clarification, and then creating questions which address these clarification points is suggested. These questions should be sent to the supplier in advance, to allow the supplier to be able to answer the clarification points on the day, and not to defer to obtaining a response/decision from someone not in attendance at the PTC meeting. The supplier should be required to submit a written response to the questions either before or during the PTC, as this will enable The College to have a written record of both the questions asked, and the responses given. It is also recommended that The College has the same representatives present for each PTC meeting, for consistency. Consideration should be given to the nature of points being clarified, and ensuring that relevant expertise is available within The College‟s PTC team to fully understand and challenge (if necessary) the responses given.

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9

Supplier Profiles

9.1 Aramark Traditionally known for their catering side of the business, Aramark have implemented a successful growth plan in the UK over the past 10 years, diversifying into vertical markets such as cleaning, grounds maintenance, and convenience stores. 

   

Winner of the Cost Sector Catering Corporate Responsibility and Contract Caterer Awards 2008 and recognised with a Craft Guild of Chefs Company Award for 2008 Operating in UK since 1972, ARAMARK Limited has annual revenues of circa £400 million. ARAMARK UK has over 12,500 employees operating over 1,000 client locations throughout the UK and offshore. We provide service solutions to a broad spectrum of market sectors including business and industry, education, healthcare, offshore, judicial and defence. Our offer ranges from food service - business dining, employee restaurants, coffee bars and convenience store management to grounds maintenance, reception duties, cleaning and hot and cold beverage solutions for offices and other places of work. Website: www.aramark.co.uk

Aramark UK are part of a global $12bn company founded in Los Angeles in 1936.

9.2 Balfour Beatty Balfour Beatty is large UK organisation, traditionally founded in engineering services. Similar to Aramark, Balfour Beatty has embarked on a successful expansion programme over the last 20 years, and now has delivers services across a substantial number of areas.        

Order book of in excess of £15.2bn Operating in Road, Rail, Housing, Air, Power, Water, Education, Health, and Defence markets Located in over 80 countries worldwide Balfour Beatty was founded in 1909 by George Balfour, a Scots mechanical engineer, and Andrew Beatty, an English chartered accountant. Corporate strategy is to become “a world leading provider of services to infrastructure owners”. Four core businesses exist within Balfour Beatty: Infrastructure Investments, Professional Services, Construction Services, and Support Services. The Facilities Management part of their business (which includes the cleaning services included within their tender submission) exists within the Support Services part of their business. Website: www.balfourbeatty.com

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9.3

Busy Bee

Busy Bee Cleaning Services Limited (BBCS) are an independent, privately owned cleaning company with over 250 employees based in High Wycombe. BBCS is owned and operated by its founder, Gary Stevens.        

ISO 9001 accredited Member of British Institute of cleaning Services (BICSc) Currently has a £520k contract with Buckinghamshire New University for cleaning to academic and residential areas. Latest financial year turnover was £8.2m Net profit was £303k Proposed use of PDA‟s to deliver a technology-rich service Established in 1983 Website: www.bbcs.co.uk

9.4 Churchill Churchill Contract Services Limited was established in 1978. Based in Hertfordshire, the company delivers services across three major platforms: Service Solutions, Cleaning Services, and Security Services.      

ISO 9001 and 14001 accredited Currently have over 250 contracts in the education sector, although primarily in primary and secondary education. Latest financial year turnover was £37.1m Net profit was £1.5m Focused on reporting abilities in their PQQ submission Website: www.churchillservices,com

9.5 Hayward Established in Slough in 1973, Hayward Services Ltd is a facilities management company, focused primarily on the delivery of contract cleaning services to the premises of public and private sector clients.        

ISO 9001 accredited Member of British Institute of cleaning Services (BICSc) Over 250 employees Operates a £125k contract for Reigate College Also has a £560k contract with Dorset County Council which includes a number of primary and secondary schools. Latest financial year turnover was £5.3m Net profit was £144k Website: www.haywardservices.co.uk

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Royal Holloway Tender Report - Cleaning  

Report on the Royal Holloway Cleaning tender process by Alan Heron, Director of Operations, CEL Procurement.