Next Generation CCS Framework – will it redefine the rules of engagement?

Amongst the biggest driving force of change in the UK FM marketplace, the next-genCCS framework has already captured attention of suppliers and government organisations. Baskar Sundaram, Founding Director of Baachu, outlines how this next-gen CCSframework is overcoming the challenges associated with its predecessor and why it will be the driving force of public sector FM market in the years to come.

Public sector FM spending in the UK –comprising of one-third of the total FM spend – is a marketspace which historically has helped several FM players develop considerable scale.Majority of this contracting spend is routed under the current framework agreement ‘RM1056’, governed by Crown Commercial Service (CCS) – an executive agency sponsored by the Cabinet Office. As the current framework is due to expire in 2019, CCS has initiated groundwork to shape up its successor.

The opportunity

The pan-government CCS FM collaborative framework is set to become the foremost route for public sector FM spending in the years to come, covering organisations such as central government departments, local authorities, schools, NHS, etc.The uniqueness of public sector FM marketspace is the sheer size of itsopportunities which has even reached hundreds of millions of pounds historically – something which can only be fantasised within the private sector in the UK. The size of the pie –c.£40bn as of 2015 – isalso forecasted to grow at a moderate pace and reach c.£45bn by 2019, despite of economic and socio-political headwinds. The next-gen CCS FM framework is expected to cover c.60% of public sector contracts.

The next-gen framework is split into two phases:

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As obvious, national and local suppliers have historically competed ferociously just to be the part of the framework.

Current challenges

Despite being the dominating route for procurement, the framework hasn’t been the most suitable route for the same and the stakeholders have voiced their concerns time and again.

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CCS has been gatheringinputs from both buyers and suppliers to address their concerns in the new framework. Its survey revealed a few astonishing facts, such as the government is increasingly been seen as not a customer of choice by the market and the buyersare concerned with inadequate competition.

The next-gen CCS framework

The newer version is likely to feature an improved service lot categorisation; a fit for purpose commercial model suitable for large and small packages; and potential for direct contract award for lower value banded services. The government has also mandated inclusion of social value considerations into evaluation models (inclusion of SMEs, apprenticeships, etc.).

Despite of challenges, this arrangement – as a government policy – will continue to tighten hold over public sector spendingin the long term. As Central Government mulls to route more procurement through this route, buyers will have no choice but to get the best out of CCS framework.

Is CCSFM framework for you?

For providers

Government’s mandate to bring social value, inclusive economy and innovation on the table for bidding would considerably drive a collaborative approach within the supplier community. Large FM players will be hunting for experienced local players to find ways to impact local economy and demonstrate social value. Furthermore, suppliers of chemicals, laundry, pest control, waste management, hygiene, etc. – will also have the opportunity to demonstrate their innovation led proposition to large FM players.

While the final framework would include 25 national and 125 local suppliers, the need for collaboration will benefit considerable number of FM products and servicesproviders.

Suppliers need to determine whether leaving aside public-sector FM pie is in the best interest of their organisation over the long term, especially when socio-political issues such as Brexit and migration are looming over a fragile economy.

For buyers

CCS framework aims to standardise and commoditise critical public services. CCS charges 5% fee to buyers. There is a level of flexibility in the framework for individual public bodies to tweak it to suit their needs. With high procurement costs, reduced public budgets public bodies may need to carefully consider if this is right for them.

Conclusion

While challenges in the current framework are overwhelming, CCS’ quest for improvement and a localised approach towards contracting & social value generation, are likely to make it attractive for both buyers and suppliers. With the government planning to rationalise procurement policies and costs, going forward CCS framework may be the only route to tap sizeable contracting opportunities. The framework is likely to revise the market dynamics, impacting all stakeholders.

 

Collaborative capabilities, localised supply chain, innovation and social value generation will be the key competitive propositions to enter the new framework. To know more about the framework, how your organisation can build or measure such differentiators, please get in touch at baskar@baachu.com