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Mini-Competition for a Contract to Provide Property Services to the Government Property Unit Response to Brief

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Mini-Competition for a Contract to Provide Property Services to the Government Property Unit Response to Brief Mini-competition for a Contract to Provide Property Services to the Government Property Unit Response to Brief August 2011 12 August 2011 Government Property Unit By Email J Mark Ridley E: [email protected] DL: +44 (0) 20 7409 8030 FAO Paul Mayes and Stuart Banks F: +44 (0) 20 7409 2635 20 Grosvenor Hill London W1K 3HQ T: +44 (0) 20 7499 8644 savills.com Dear Sirs CONTRACT TO PROVIDE PROPERTY SERVICES TO THE GOVERNMENT PROPERTY UNIT Thank you for giving Savills the opportunity to tender for the next phase of the implementation of the Government’s property strategy for the Civil Estate. This project is clearly of paramount importance to GPU, Central Government, and the wider UK plc. Savills was delighted to be appointed to the London and Bristol pilot project back in February. The work carried out with the GPU team over the last six months has given us critical insight into the demands and needs of your remit, and the political and property context within which you operate. I have maintained a close involvement in the work over this period and have recently met with John McCready and Robert Heskett to discuss progress. I can give you my personal assurance that the high standards of service set by the Savills team to date will be maintained across any further appointments. We understand that your principal requirement is for a market-facing advisory role to help inform your strategy, together with the implementation of this. Savills has the most extensive network of offices throughout the UK, covering all sectors and this platform gives us unique market intelligence from experienced professionals. This we believe will continue to deliver best value advice for the GPU. It has been our aim to respond to the submission in a clear and concise fashion following the requirements of the brief. Due to the importance of these appointments, if selected I will propose to continue my watching brief via our Savills internal steering group so that we can ensure that we maximise opportunities and leave no stone unturned in considering how to maximise value from the Civil Estate. We remain totally committed to the existing contract, which continues on a project-by-project basis, and also to developing a similarly successful working relationship with the GPU Regional Teams on a national basis. I look forward to the opportunity to meet you and the GPU team at interview stage. Yours faithfully J Mark Ridley Chairman & Chief Executive Offices and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East. Savills Commercial Limited. Chartered Surveyors. A subsidiary of Savills plc. Registered in England No. 2605125. Registered office: 20 Grosvenor Hill, London W1K 3HQ Contents Contents 1 Introduction 2 Executive Summary 3 SECTION A – Qualities and Resources 7 SECTION B - Personnel 43 SECTION C – Charging 67 GPU – National Property Services Tender Page 1 Savills Response to Mini-competition Brief Introduction Savills is delighted to be given the opportunity to submit this response to the mini- competition brief issued by the Government Property Unit (GPU), under what we understand will now be the direction of the Cabinet Office (CO), rather than the Department for Business, Innovation and Skills (BIS) as previously. Within this submission we have answered each question in accordance with the brief. We confirm that we are not aware of any conflicts of interest that will preclude Savills from acting on this project. We trust our proposal is of interest. If you require clarification on any point, or need further information, please do not hesitate to make contact. Liell Francklin, Director and Savills Contract Director T: +44 (0) 20 7409 8712 M: +44 (0) 7870 555 712 E: [email protected] GPU – National Property Services Tender Page 2 Savills Response to Mini-competition Brief Executive Summary Understanding the context of the opportunity The £370 billion estimated value of the Civil Estate is much publicised, as are the widespread and significant cuts to Departmental budgets. Within this context, the GPU is tasked with strategic management of Government property, devising strategy and implementing execution plans in order to drive out savings for the public purse. This vital role is carried out in conjunction with Central Government Departments and associated bodies, and their existing property strategies. The GPU national property services contract reflects the natural progression of Government property strategy, and dissemination into the regions of the positive outcomes of the London and Bristol pilot schemes. Lessons Learned from Savills work on London and Bristol Pilot Projects We are delighted to have been appointed to undertake an advisory role on the London and Bristol pilot project that directly preceded this contract. There are several building-specific execution plans under way at present with which we are involved. Through this work we have gained important insight into the modus operandi and remit of GPU and how it has evolved, and as such, the desired outcomes from this project. Key points include: • GPU operates as a facilitator and overseer of Departmental property strategies, with the benefit of a high level vantage point over capacity and demand across the whole civil estate. The primary goal is to cut costs for the Exchequer, with generation of capital receipts as a secondary aim. • This is currently focused on the Spending Review 2010 period, and is principally achieved through implementation of the National Property Controls (such as the lease moratorium), required space standards, improved FM contracts, and negotiations of more favourable terms, in the event that GPU approve a lease renewal in response to an application by a Department. • An additional layer of cost saving is delivered via accelerated exits. Advice is therefore needed from advisors regarding refurbishment costs, market specifications, alternative use options, current and forecast rental values and crucially, the attitude and amenability of landlords to doing deals, as well as an element of creative thinking, in order to drive out additional savings through early surrenders, rent erosion or bespoke property deals. • The requirement is then to follow this up with focussed market advice on each SURPLUS asset, from our position at ‘the coalface’ in each regional centre. Quite rightly in our view, during the London and Bristol project, the requirement has been to focus on the deliverable buildings as a priority, or where there is a ‘chain move’ that brings in overall savings which could only have been delivered via GPU’s holistic perspective. • Our initial support role was to collect and collate data on CORE and SURPLUS buildings, in conjunction with EPIMS, to inform capacity within the estate. Within Savills we have developed our understanding of the EPIMS system, through our work in London and Bristol, and the vital role that it plays in strategic management of the Civil Estate. GPU – National Property Services Tender Page 3 Savills Response to Mini-competition Brief • We have been impressed by the progress of GPU, how it has adapted from the pilot vehicle approach to more of a property advisory role, and the team’s detailed grasp of the property fundamentals of the Estate. This is not a contract that requires reams of paperwork and reports, beyond the initial compilation and collation of the templates and property terrier, particularly given that GPU will now be handling the modelling elements in house. • The working relationship between GPU and Savills has evolved during the Pilots to focus on a working list of actions, to push through outputs on key deliverable buildings, under the leadership of a specialist Agency Director. We propose to replicate this approach on this national contract. • In terms of procedure, the Savills team is entirely familiar with GPU required working practice in terms of reporting lines and procedures, and invoicing approach. We are familiar also with the terminology used within GPU, in terms of capacity and demand, which will ensure that the Savills team can ‘hit the ground running’ in the event that we are appointed. • We have also worked with Departmental property teams to match their property strategies with wider GPU goals. Therefore we understand the relationships between the two, and the importance of mutual cooperation, as well as some of the key individuals within Departments. • Understandably, public relations surrounding Government property are very sensitive, and our advisory role has necessarily been undertaken within this context. This relates in particular to disposals of assets, and we anticipate that this will be important under this new contract, where implementation of agency advice is likely to be more of a feature. • Similarly, accountability and transparency are key considerations for GPU. Whilst cost saving is the key driver, this needs to be taken in the context of political ramifications, and the wider implications of proposed moves. • Whilst we have the expertise and resources to undertake the full UK remit single- handedly, we appreciate that GPU will likely want to protect against the inevitable conflicts of interest by appointing more than one agent. Overview of Savills proposal Savills proposal does not seek to dazzle with graphics or unnecessary marketing material. Instead it focuses on how our expert teams can provide best in class commercial property advice to GPU. We understand the underlying principles and goals, and how best to assist in their delivery. Our delivery teams throughout the UK are not hampered unduly by existing estate management contractual relationships with Central Government Departments. Whilst we work with many public sector clients, our core business is market-facing. We know the landlords, developers and property companies that often hold the key to unlocking occupational savings, and how to extract them through the negotiation and deal-making process. In our preparation of the bid for the pilot projects, we debated the likely downstream national rollout of the project, in the context of our strong national office network and market presence.
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